Industry Benchmark

By Mark Harris

Regional Analysis

Canada

Canada's economy is doing well despite the slowdown in the US; there is a strong resource industry and Canadian real estate prices seem to be holding, so the short term outlook is good.

The key Canadian markets are Toronto (82% occupancy) and Vancouver (88% occupancy), followed by Calgary, Ottawa and Montreal.

One-bedroom units are more dominant in the Canadian mix than in the US. Toronto reports 65% one-bedroom units while Vancouver reports 52%. Extendedstay hotels are less common in Canada than in the US, where they are active in the one-bedroom market. Corporate housing may be satisfying a larger share of this niche in Canada as a result.
Source: CHPA.

Over the last few years there has been a move to more extended stay or project work and less permanent relocation, due partly to more dual income earning families, communications technology and people being less willing to move permanently then they were previously. Around 75% of bookings taken by Canadian serviced apartment operators originate indigenously.

Canada has a more static inventory than the US due to more stringent leasing requirements. It's difficult to get a short term lease; most landlords in Canada require at 1 year lease minimum, making it harder for operators to maintain high occupancy.

Canada has a more static inventory than the US due to more stringent leasing requirements A lot of the corporate housing in Canada is in residential condominiums. There is typically a propertymanagement company and board of directors to cooperate with which represents potentially hundreds of owners who own a share of the building. One wrong move and they may attempt to change the bylaws so that furnished housing providers are not allowed to lease for short periods of time.

Corporate housing inventory in Toronto and Vancouver is estimated at 2,505 units; total estimated inventory for Toronto was 1,847 units in 2007 whilst Vancouver has an estimated inventory of 658 units.

Some providers are likely to expand their operations to other cities in order to grow, however there is increased competition from the extended stay hotel sector.

The industry in Canada is dominated by local or regional providers: - Delsuites and Minto in Toronto (the latter also in Ottawa), High Street Corporate Rentals in Vancouver, Exec Suite in Calgary and Enville in Montreal.