- What Student housing in Canada is still in its infancy with only 54 private student housing portfolios across the country
- Why Investment in the asset class has not kept pace with demand
- What next Both domestic and international investors are beginning to eye the Canadian market as an investment opportunity
Canada’s stock of dedicated student housing is underdeveloped compared with that in countries with similar education opportunities, market research firm Bonard said in a recent report.
Including private and nonprivate stock, Canada had 165,957 purpose-built student housing beds as of 2023 that provided housing for just 10% of students. For comparison, the U.K., with 562,303 beds, has a student housing provision rate of 30%.
Most of the Canadian beds were in the country’s largest education hubs: Toronto (23,336), Waterloo (22,198), Vancouver (15,792), Ottawa (13,140), London (13,053) and Montreal (13,086).
Within that stock, the firm tallied 376 private student housing properties with 59,584 beds, with another 30 assets with 10,956 beds under development.
Bonard also noted that the student housing stock is largely owned by small local operators. Of the 54 student housing portfolios identified by the firm, 55% do not exceed 500 beds.
That said, there are a few major players in the space. With 26,774 beds under management, Campus Living Centres is handily the largest operator of student housing in Canada. The second largest, Canadian Campus Communities, has 3,137 beds.
With 85% of the purpose-built student housing stock, domestic investors dominate the market, but international investors are starting to take a look. Many already consider Canada “a promising destination to establish a global footprint,” Bonard said, driven by strong socio-demographic and economic fundamentals in the country.
Canada had 2.2 million postsecondary students for the 2021-2022 school year, including 408,000 international students. With existing stock providing housing for just 10% of students and the number of international students remaining high, there is an opportunity to be had.
“The story with all the demand is that it was just booming, booming, booming, but no one was looking on the other side of the coin: Where are they going to live?” Martin Varga, real estate business development director at Bonard, told Green Street News. “That’s why there are some gaps happening now.”
Developers who have been in the student housing game for some time now, both in Canada and abroad, have seen the benefits: consistent demand, generally stable tenants, yearly turnover allowing for rent adjustments and an ability to charge more per square foot.
“There are some stakeholders that have been developing their portfolios for a longer time, and these guys have a bit of an advantage with some operational stock already in place,” Varga said. “On the other hand, we see multiple types of units that can be developed, respecting local circumstances and origin of students.
“Monitoring developments across Canada and globally, you don’t need to develop such big rooms like in multifamily, hence you can get more per square foot. Eventually developers build this smaller room where you can get much more from the rental.”