Sunview Suites Provide Unique Opportunity in Heart of Canada’s Technology Triangle
Canada’s flourishing Technology Triangle—consisting of Kitchener, Waterloo and Cambridge—is presenting prime opportunities for real estate investors.
The Kitchener-Waterloo area is second only to Silicon Valley in terms of growth of start-up companies with more than 1,000 technology firms, including international powerhouses Microsoft and Google, as well as 3M, FourSquare, Communitech, Desire2Learn, to name just a few. And with more than 60,000 people pursuing post-secondary education, there is a big demand for housing for students and young professionals working in the area.
“This (student housing) is an interesting market and one that’s very mature in the United Kingdom and the United States,” says Charles Jaque, director of sales at the Milborne Group. “The Canadian Pension Investment Board has invested $2 billion in each of the past three years in the U.K. and U.S. markets for student housing.”
Other large investment groups realize the benefits of investing next to major universities, which are economic powerhouses. In Canada, there are a small number of players in the market. One is Prica Global Enterprises, the leader in student housing in Canada; in Waterloo Region, it has almost 15 percent of the total rental market.
For the first time, Prica is offering condominiums for sale at one of its projects. Sunview Suites at 258 Sunview Street will have 298 luxury turn-key suites that will appeal to young professionals who flock to Waterloo for career opportunities or to students attending the University of Waterloo or Wilfrid Laurier University, just a short walk away. The project is a five-minute drive from uptown Waterloo, an eight-minute drive from the Kitchener GO Train station, in the midst of shopping and restaurants, and close to many public transportation modes.
The modern, upscale suites are fully furnished and come in studio, one bedroom, one bedroom-with-den, and two-bedroom plans. Prices start in the high $200,000s and a two-bedroom suite can be purchased in the $300,000s –far less than properties in Toronto, just an hour away. The suites will appeal to investors looking for a stable, reasonably priced, hassle-free investment. A wholly-owned subsidiary of Prica, KW4Rent, will handle rentals and property management. Among the buyers are parents of students attending the nearby universities who realize it makes financial sense to own a condo for their child to live during their post-secondary years.
“The area housing boom has primarily focussed on students, but it’s now moving on to young professionals and employers as well,” says Jaque. “There is a lot of stability in this marketplace and it’s a safe, clean, multicultural place to live.” Housing in prime locations next to Triple A universities weather economic ups and downs; studies have found that post-secondary institutions see increased enrolment during recessions. The two local universities have prestigious reputations and their first-rate computer science, engineering, and math programs are attracting many international students, with a large percentage from China and Asia.
There’s been a major evolution in Waterloo over the past decade and a half, says Jaque, as older rental houses and low-end rooming houses have been replaced with attractive, purpose-built student housing. Sunview Suites will have luxurious features such as stylish lobbies, energy efficient design, gourmet kitchens, European styled bathrooms, designer lounge and rooftop terraces. There will be commercial and retail space in the building, for businesses such as eateries, convenience stores and services, etc. The buildings are under construction and will be ready for occupancy in September.
Parents of students are willing to pay for their children to stay in well built, hotel-style housing, Jaque says, and the suites’ sophisticated design will also appeal to young professionals. About 20 percent of the students stay in the area after graduation.
This form of “alternative investing” is an excellent and safe option for investor buyers, says Jaque, with a good return on investment and steady cash flow.
Although the Ontario government imposed rent controls that limit landlords to a maximum 2.5 percent annual rent increases as long as the same tenant lives in a unit; for student suites typically leased for one to four years, that rent cap can be reset with every new tenant.
With the area continuing to develop and grow as a major technological centre in North America, Sunview Street is at the heart of a rapidly evolving part of Waterloo. As well as the condo suites offered there, five-bedroom investment suites are also available in a project next door.
For more information, visit www.sunviewsuites.com
Tracy Hanes is a GTA-based writer specializing in real estate.