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Case Study

Kitmat 2013 Review and Outlook

Victoria (Head office)
Phone: (250) 658-8060
Toll Free: 1-877-907-8060
Fax: (250) 658-8067
Regional Manager: Dale Schuss
Email: info@randallnorth.ca
485 Garbally Rd, Unit D
Victoria, BC V8T 4T3

Mailing address:
PO Box 53531
Victoria, BC V8X 5K2
Canada

Prince Rupert 
Phone: (250) 627-1414
Fax: (250) 658-8067
Regional Manager: Dale Schuss
Email:dale.schuss@randallnorth.ca

Mailing address:
P.O Box 728
607 2nd Avenue West
Prince Rupert, BC V8J 3S1

Cowichan Valley
Phone: 778 356-0021
Fax: (250) 658-8067
Regional Manager: Gloria Carvalho
Email: gloria.carvalho@randallnorth.ca

KITIMAT CASE STUDY

2013

THE CHALLENGE

To fully capitalize on the sudden growth in the Kitimat market and respond to changes in tenant requirements.

BACKGROUND

Kitimat was a master planned “garden city” town that started around 1953.  The Province of BC and the Aluminum Company of Canada (ALCAN) worked together to harness power from Kemano, many miles south and develop an aluminum smelter at a coastal location with a deep ice free port; this location became Kitimat and was named for a nearby First Nations settlement.

Kitimat was developed and promoted as a new city that would have a solid future.  Grand plans were made for a community of 50,000 people, taking advantage of the steady employment, the need for service industries, health care and regional government, all within an ideal landscape of residential homes and commercial centres.

In the late 1950’s, as Kitimat was being further built, much media attention around the western world brought a lot of interest.  The hospital built was very large and ready for the masses.  Unfortunately, perhaps due to the isolated location and long snowy winters, the masses did not arrive.

The city had an air of being overbuilt in the next few decades.  The population reached just over 12,000 but the other large residential areas to still be built, never were.  By the year 2000 the city had a falling population of 9,000 (maybe less) and in the next couple of years two large employers closed down leaving a reduced ALCAN (now Rio Tinto Alcan), as the primary employer.  The large, much oversized hospital was closed and imploded and replaced by a much smaller medical centre.

Just recently, the promise of a liquefied natural gas terminal along with other plans for an oil pipeline port and refinery has boosted the city once again.  Aged residential properties that sat dormant have been renovated and new construction has occurred on a scale that has not been seen for a very long time.  Investors are now flocking into the community and work forces are demanding good housing.

RECENT DEVELOPMENTS

In September 2012, Randall North had a vacancy rate in Kitimat over 23% and the average three bedroom townhouse unit was renting for just over $1,000 per month.

Six months later, the vacancy rates for the same type of units was just over 6% and the average townhouse was now almost $1,325 per month (a 32.5% increase in 6 months!).

By September of 2013, many units were converted to furnished and Randall North was able to meet this new demand by the temporary work forces, by sourcing furnishings and housewares in a quick and cost effective manner.  Vacancy rates were about 3% and falling and rents for those same townhouse units averaged just under $1,500.

Randall North works closely with the companies and agencies that bring tenants to Kitimat.  We are a preferred contact and housing supplier in the city.  As of 2014, the vacancy rate for Randall North is 0% and those townhomes now rent for on average over $1,800 per month with individual rents as high as $3,000 per month furnished.   Many townhomes recently rented on acquisition or turnover rent for much more than average as have single family homes.  Due to controlled rent increases, tenants before the “boom” have rents now considerably below market which brings the average lower than the actual current market.

Randall North feels well positioned in Kitimat, Terrace and Prince Rupert.  The growth has been sudden and Randall North has met the challenge to the benefit of housing investors.

IF YOU ARE LOOKING AT KITIMAT, CALL OR E-MAIL RANDALL NORTH REAL ESTATE SERVICES INC.