GHN Thought Leader

Mark Sparrow
Executive Vice President, JLL | Hotels & Hospitality Group Where do you see the best opportunities for hotel investment or development?

Mark Sparrow: Over the past five years, Canada has been a tale of consistency. With supply relatively in check across the country, outside of a few specific markets in the prairies, and demand increasing at a strong clip, we have witnessed strong growth across the country. Along with strong operating results, Canada has continued to see increased demand both locally and internationally for quality real estate product in the major markets which had led to pricing escalation in line with key global cities around the world. In turn, local demand has been challenged to find product in their backyard, pushing their search beyond their typical geographic boundaries and entering new secondary markets and/or markets outside of their regional hubs in search of yield.

The spotlight has continued to shine toward Canada on the global stage over the past 24 to 36 months with key international investors and large corporations looking to expand their investment holdings in the Canadian markets, specifically, Toronto and Vancouver. With an attractive story, local commercial real estate markets have benefited from the drive north as large corporations look to expand, which is evident in the recent tech surge in both Toronto and Vancouver. In a similar fashion, our view of hot hotel markets to invest in remain Toronto and Vancouver given strong short-medium term operating outlook driven by demand and supply trends that are rarely seen in global markets of this size and prominence, and the continue global investment into these key Canadian markets.

Victoria, Montreal, Quebec City and Halifax would round out other key cities to watch in Canada with strong short-medium term investment prospects. These cities all have strong economic growth, favourable tourism trends and have either new/renovated product that are elevating top line operating results in their respective markets.

The final market segment I am spending a significant amount of my time tracking at this point in cycle is the resort market, which continues to gain investors’ attention given the strong growth trajectory over the past five to seven years, coupled with increased demand as corporate and leisure clientele continue to seek out experiential travel opportunities. Key markets to watch include the Alberta Rockies, Whistler, the Okanagan Valley and key resort destinations within 90-120 min drive from key major markets.