The latest study by London-based estate agent Benham and Reeves reveals promising signs of recovery in the UK’s corporate housing market, though it’s still trailing 34% behind the levels seen prior to the pandemic.
Corporate housing involves service providers who lease properties temporarily to corporate clients, with the stock generally comprising serviced apartments and aparthotel suites.
The examination by Benham and Reeves focused on the monetary size of the sector and its evolution over the previous decade.
The data reveal that in 2013, the estimated market size stood at £1.240bn, rising by 6% in the lead-up to the pandemic to reach a total market size of £1.319bn by 2019.
However, the pandemic-induced workplace and travel restrictions profoundly impacted the sector in the succeeding years.
The corporate housing market witnessed a 1% shrinkage in 2020, followed by a steeper 54% fall in 2021, reducing the market size to a mere £602.9m.
The brighter side is the sector’s subsequent rally. The previous year saw a commendable 44% year-on-year increase in the corporate housing market size, taking it to £865.6m.
Despite this appreciable bounce-back, the sector still trails 34% below its pre-pandemic state, and a full recovery is yet to occur.
The market expansion witnessed last year is anticipated to extend into 2023, albeit at a slower pace, with a further 7% increase forecasted. This would raise the sector’s total market size to £930.1m, though still short of its pre-pandemic standard.
Marc von Grundherr, Director of Benham and Reeves, shared his insights:
“The corporate housing market bore a substantial brunt during the pandemic, with work-from-home mandates and domestic and international travel restrictions triggering a drop in demand.
Consequently, the sector experienced a significant pullback in total market size and is yet to bounce back fully.
Nonetheless, there are several encouraging signs. Last year marked a return to normality in both work and travel aspects, which provided a substantial uplift to the corporate housing market, and this uptrend is expected to persist this year.
The lingering question is whether the sector will reclaim its pre-pandemic performance level, as the ongoing pandemic-driven alterations to our work patterns continue to suppress demand.”