The European serviced apartment sector has boomed in the past year with 20,000 units planned for the next five years, according to hotel consultants HVS.
In a survey of leading serviced apartment operators undertaken by global hotel consultancy HVS found the sector saw strong growth in 2017 with increases in RevPAR in London, the UK regions and across the rest of Europe.
The survey, published in the report ‘The Serviced Apartment Sector in Europe: Alive and Kicking’, reveals a growing similarity to the hotel sector with the use of hotel-inspired structures and operating models. According to the survey, over half of respondents are planning to open new properties in markets such as France and The Netherlands, with the US and Eastern Europe starting to appear on the wish list.
However, the majority of operators said they would like to consolidate their presence in the markets in which they already operate, such as Germany, the UK and Western Europe. London remains the top location for developing serviced apartments in the UK, accounting for just under 40% of the country’s pipeline. Manchester was also found to be popular, accounting for 25%.
Germany was revealed as operator’s second country of choice when it comes to expansion, with the cities of Hamburg, Berlin and Munich mentioned as key locations.
The HVS survey revealed that the top three brands in terms of expansion are Adagio, Staycity and SACO. Adagio Aparthotels, the joint venture by Accor Hotels and Pierre & Vacances, accounts for more approximately a third of the total pipeline for expansion over the next five years.
The report co-author Magalí Castells, associate at HVS London, said: “We are seeing more management and franchise agreements in serviced apartments, rather like that of the hotel sector. This is largely because these two operating models offer operators more flexibility, the ability to expand to readily and less risk.”
Arlett Hoff, director, HVS London, added: “Last year marked the true consolidation of this industry, which has now found its place in the investor community. The continued positive trend demonstrates increased demand and need for this product type, as well as a growing interest from investors in this real estate asset class.”