Caisse leads fourth investment round as funds back hotel growth in Toronto and BC markets
Germain Hotels has secured a $160m equity investment led by Caisse de dépôt et placement du Québec, with support from Fonds de solidarité FTQ and Investissement Québec, according to a joint news release issued Thursday.
According to The Globe and Mail, all three investors have previously backed the Quebec-based hotel chain, along with the founding Germain family.
The new funding aims to support Germain’s national expansion, as Canada’s tourism sector shows signs of stabilising following pandemic recovery.
“Now we have some fresh money,” said Jean-Yves Germain, co-founder and co-president of Germain Hotels. “We hope with this funding we’ll be able to increase our presence in the Toronto market and in the BC market.”
Germain Hotels currently operates 19 properties in Canada across three brands: Le Germain (high-end), Alt, and Escad.
The company plans to open an Alt location at Ottawa airport later this year and a Germain hotel at the Casino de Montréal.
In March, Germain also partnered with Reliance Properties to develop a hotel on West Hastings Street in Vancouver, set to open in 2029.
Tourism spending in Canada rose 3.6 percent in 2024, following a 15.3 percent increase in 2023, according to Statistics Canada.
The Business Development Bank of Canada stated in a March analysis that growth is levelling off but noted cautious optimism.
It said a weaker Canadian dollar may attract more foreign visitors, while economic instability — partly linked to US President Donald Trump’s tariff policies — could restrain domestic spending.
Germain expressed concern about external economic effects. “If the economy is hurt in Canada for sure we will be hurt,” he said. Still, he added, bookings for the summer are looking “very good.”
In the Toronto area, Germain currently operates three hotels, though Germain believes the market could support between eight and 12 properties.
He said the company is also exploring additional BC sites beyond the West Hastings project.
This latest financing round marks the fourth time Caisse has invested in Germain Hotels.
“It’s part of our ambition to bring great Quebec companies to the next level,” said Kim Thomassin, executive vice-president at the Caisse, who leads its investments in Quebec.
To date, Caisse has committed approximately $100m to Germain.
Its real estate subsidiary, Ivanhoé Cambridge, previously held major hotel assets like the Royal York in Toronto and the Chateau Laurier in Ottawa, but divested them over the past decade to focus on residential and logistics investments.
“We feel that we’re not hotel experts and we want to leave that to those who are,” said Sylvain Fortier, Ivanhoé’s chief investment officer at the time, in 2014.
Thomassin noted that the Germain investment comes through the Caisse’s private-equity group under the Ambition ME program, which supports mid-market companies in Quebec.
“We see it as an investment, yes in the industry. But in the management and the key talent and the people and the business plan and the growth plan that we see,” she said.
