"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"
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.
Director of Benham and Reeves, Marc von Grundherr, commented: “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.
"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.”
