A rendering of the new City Centre Arena and Cultural Event Centre set for 10355 King George Boulevard. (City of Surrey)
On Tuesday, the City of Surrey formally announced an agreement to develop the 10,000-seat City Centre Arena and Cultural Event Centre with the Vancouver Giants to relocate from the Langley Event Centre to serve as the new arena’s anchor tenant.
“The project is anticipated to generate $2.4 billion in economic benefits for the city over the next 10 years,” said the City of Surrey. “The project will also include a luxury hotel, conference space, and housing, helping create a new sports and entertainment district that will attract investment, support economic growth and expand Surrey’s capacity to host major events.”
The City Centre Arena and Cultural Event Centre will be located at 10355 King George Boulevard, a five-acre site adjacent to Surrey City Hall and steps away from the Expo Line SkyTrain’s Surrey Central Station.
The most interesting aspect of the announcement, however, at least for the real estate community, is that the City does not own the site and said it will be acquiring the site via a “strategic land swap agreement.”
The site was formerly home to a Safeway, which closed in Spring 2021, and its sprawling surface parking lot. Vancouver-based developer Wesgroup Properties acquired the site in Q4 2022 for $108.5 million from Crombie REIT (TSX: CRR.UN) and has been planning a master-planned community called Civic District. Wesgroup unveiled the project a few years ago, then revised it multiple times, with a new rezoning application approved by Surrey City Council in late-May.
The City says the City Centre Arena and Cultural Event Centre will have a net estimated cost of $360 million, with funding provided via the 2026 Budget. Completion is expected in 2030.
In their press release, the City did not provide details about the land swap agreement (or name Wesgroup) besides the addresses of the properties, but did attach a land exchange transaction assessment prepared by Andrew Evans of EY-Parthenon. The three parcels the City would send to Wesgroup in the trade are 19165 39 Avenue, 2750 194A Street, and 12830 96 Avenue. The third parcel makes up half of the Cedar Hills Shopping Centre, the other half of which — 12852 96 Avenue — is owned by Janda Group Holdings Inc. and not the City of Surrey.
According to EY-Parthenon, Surrey and Wesgroup had initially discussed a trade involving a different set of properties before settling on these three. Their report also notes that Wesgroup was not actively looking to sell the site, pointing to the recently-advanced rezoning application, which meant that the City may not have been able to acquire the property at a low price like they would have if Wesgroup had put the property on the market. Wesgroup also would have had additional leverage knowing that the City wants the site for the new arena.
The Civic District site was also compared to the previous site where the City Centre Arena was planned, a 6-acre site directly east of the Whalley Athletic Park. Half of the site is leased to the BC Lions for use as a training facility and the other half is used as a soccer field and parking lot for Tom Binnie Park. EY-Parthenon found that the Civic District site “has much more potential to positively impact the build out of City Centre by leveraging the existing municipal investments in place and helping to create a dynamic regional hub.”
“While we have spent the last four years advancing our Civic District masterplan, we recognize the significant opportunity that this exchange creates for the City of Surrey to build a new arena and cultural event centre and for Wesgroup to diversify its real estate portfolio with two industrial development sites and one income-producing retail asset,” said Wesgroup in a statement provided to The Realist.
“Third-party valuations of each of the transacting properties were prepared for SCDC and the Property Owner,” said EY-Parthenon in its assessment report. “EY-Parthenon has summarized these valuations and has identified where there were differences in these valuations. EY-Parthenon’s scope was not to validate the appraisals or the broker opinion of value but instead to identify what was impacting any potential material differences in values.”
According to EY-Parthenon, both sides agreed on a valuation process where they would select their own appraiser, but use a common set of assumptions. The appraisals for both sides were completed in Q1 2026 and the City also solicited a Broker Opinion of Value for the two Campbell Heights industrial properties. The appraisers and broker used were not disclosed, but the valuations were:
“There is insufficient transaction activity in the market to rely heavily on findings from the direct comparison approach, and the land residual approach is highly sensitive to a wide number of theoretical assumptions given the nature of the market and the wide mix of uses in the proposed project,” said EY-Parthenon. “As an example, in the residual approach, both appraisers assumed pricing levels that may not currently be achievable in today’s market, but that they perceive might represent more of a stabilized pricing level moving forward.”
“The historical purchase price of the property is relevant to consider given it was only acquired in 2022 for $108.5M,” they added. “At first glance it would be reasonable to assume that the value would have decreased since then given the decline in development land values experienced in the local market. It is critical to consider the context regarding the 2022 transaction, namely the fact that it was negotiated in 2021 and was perceived to be at a discount to the market given the below market fixed price agreement to construct a new grocery store shell space for the vendor. If the land exchange does occur, the purchase option covenant used to secure the agreement to deliver the shell space would be removed by the Property Owner.”
Notably, EY-Parthenon said that it was Surrey that approached Wesgroup about potentially acquiring the property, adding that Wesgroup was planning to hold onto the site and develop it once market conditions improved. They said Wesgroup also set a minimum price during negotiations, which was not disclosed. Wesgroup ultimately agreed to a price lower than their own appraisal and equal to Surrey’s appraisal.
“The combined value attributed to the City’s three Disposition Properties is intentionally equal to the value of the Acquisition Property as the intent was for neither party to have to provide additional funds to balance the transaction,” the assessment report states. “While the values attributed to the two industrial properties are slightly below SCDC’s appraised value they are generally in line with SCDC’s Broker Opinion of Value ranges.”
The agreed upon values were $19.9 million for 19165 39 Avenue, $63.5 million for 2750 194A Street, and $33.2 million for 12830 96 Avenue, for a total combined value of $116.6 million — the value Wesgroup agreed to for 10355 King George Boulevard.
The transaction does not appear to have been completed yet. EY-Parthenon said in its assessment report that the two sides “tentatively” agreed to the above values. They also noted that “The current term sheet includes a restriction on the resale of the Disposition Properties in 2026 and if they are sold during 2027-2029 prior to being developed there is a pricing mechanism for the City to share in any proceeds above the current proposed transaction value.” There is a similar mechanism in the event that the City sells the Civic District site, although it is safe to say that is unlikely.
The report is dated June 2, but the City’s press release today said the City “will” be acquiring the site, suggesting the transaction is still pending completion.
Surrey-Wesgroup Land Swap EY-Parthenon Report
3.06MB ∙ PDF file