The corporate housing market is showing strong signs of a post-pandemic recovery, according to the latest research by London lettings and estate agent, Benham and Reeves.
Corporate housing relates to operators who rent out properties to corporate clients on a temporary basis, with corporate housing stock usually consisting of serviced apartments and aparthotel suites.
The analysis by Benham and Reeves looked at the market size of the sector and how this has changed over the last decade.
The figures show that in 2013, the estimated size of the market sat at £1.240bn, climbing by 6% in the run up to the pandemic to a total market size of £1.319bn by 2019.
However, complications posed by the pandemic, both in relation to workplace and travel restrictions, had a significant impact in the years that followed.
In 2020, the corporate housing market saw a 1% decline, before plummeting by -54% in 2021 to just £602.9m.
The good news is that the sector has since bounced back to some extent. Last year, the market size of the corporate housing sector grew by a notable 44% in a single year, hitting £865.6m.
While this rebound has been notable, it remains some 34% below pre-pandemic levels and the sector is yet to make a full return to health.
The growth seen last year is expected to continue in 2023, albeit at a more measured pace, with a further 7% increase in market size forecast.
This would push the total market size of the sector to £930.1m, although again, this would remain below the sector’s pre-pandemic benchmark.
Marc von Grundherr, director of Benham and Reeves, said: “The corporate housing market suffered greatly during the pandemic as not only were we forced to work from home, but international and domestic travel restrictions also brought about a reduction in demand.
“As a result, it’s no surprise that the sector saw a significant retraction in terms of total market size and it’s yet to fully recover in this respect.”
He added: “However, there are plenty of positives to take. Last year saw a return to normality both in terms of work and travel, which brought about a sizable boost to the corporate housing market and this growth is forecast to continue this year.
“The question is whether or not the sector will return to its pre-pandemic benchmark as while normality has returned, there remains a pandemic influence with regard to the way we work that continues to dampen demand.”
