Catella analizza il settore Service Apartments

Most of us have realized that the way we live and the way we work have both considerably changed in the past years. The dynamic is due to a strongly heterogeneous development in the market supply. The timespan between the idea, the consideration of all opportunities and risks and the investment or completion of the property – mostly described as a so-called niche products – is becoming shorter. Never before have so many properties in a sub-market segment had their own distinction and become trendsetters in the actual sense of the word. Because of this, the growth rates in the first phase of the market development have been astronomical in some parts. Whether it is the much discussed microapartments, co-working offices, which are shooting up like mushrooms, or the diverse possibilities of overnight accommodation in the hospitality sector.

The focus of the described development is a segment which we assign a large importance for the market in the coming years, from a structural and urban-geographical perspective. Therefore, our latest Market Tracker focuses on so-called Serviced Apartments. These are a hybrid form of residential use made up of single apartments and, besides full furnishing, further services (weekly cleaning service, reception, catering services, etc.) for a so-called “longstay” are offered, compared to the traditional residential use. The geographical location is mostly in proximity to central, infrastructural hubs as in train stations, trade fairs and/or shopping centers.

When closely analyzing the market for Serviced Apartments, the main parameters which make this segment so attractive for investors quickly become clear:

- In Europe 10,500 units are currently in the pipeline, 3,500 of these in Germany alone.
- The average time of use is approx. 5 weeks.
- The yield corridor of the last 12 months was between 4.6% and 5.2%.
- By the end of 2018, Catella Research forecasts the transaction volume in Germany at approx. 235 Mio. €. and in Europe between 525-575 Mio. €.

It is clear however, that the competition will become more intense: the market development is influenced by demands towards mobility and digitalization requirements. But also booking machines, push-notifications, “unbeatable offers” on a time-limit and the increasing short-term nature of projects in combination with increased travelling (despite Skype!), cause a structural change of work and private life towards this property type.

The market share of Serviced Apartments, which is, currently at 3% in Germany and for Europe with a global share of 14%, based on the traditional hotel sector, will increase to 10% (Germany) and 25% in Europe in our opinion. The much-used slogan of “temporary living” may seem too advertised – for investors and users – but seems to be an appropriate economic manifestation in the split between commercial and social change.

Source : Thomas Beyerle  , Managing Director Catella Property Valuation GmbH

Testata giornalistica non registrata ai sensi dell’Art.3 bis del D.L. 18 maggio 2012, n. 63 convertito in Legge 16.07.2012 n°103

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