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Serviced apartments are evolving to focus on technology, more efficient use of space and smaller units, according to a new report from hotel consultancy firm HVS.
As part of the report, a survey of potential and existing leaders, operators, developers and investors in Europe found that the majority are keen to participate in the growth of serviced apartments, with the UK, Germany and France proving to be the most interesting markets.
However, while the survey reveals that a third of investors consider the sector to have become more mainstream, two-thirds believe there needs to be more consolidation, transparency in data, and greater deal volume for it to move away from being a niche market.
The report found the fragmentation of the sector and the wide variety of offerings means that it is difficult to obtain comparative information such as occupancy, average rate and operating margins.
Report author and HVS director Arlett Oehmichen, said: “The industry still has some way to go to ensure investors and lenders understand the various business models and terminology used to describe different serviced apartment offers and they need to have data to enable them to more easily compare performance.”
The report highlighted that this year the sector has already seen some key transaction activity including the acquisition of a nearly 650 units in London by Starwood Capital Group for £206m and the acquisition of The Serviced Apartment Company (SACO) by Oaktree-backed CLSA.
A number of new brands have also entered the market, including Union Hanovers first Urban Villa in West London and CLSAs high-tech Beyonder ApartHotels brand, the first of which is due to open in London in December 2015.
