The apartment sector in Europe is currently booming, with around 18,000 to 20,000 new ‘tourist apartments’ set to be added over the next five years. At the same time, HVS discloses only those projects that have been publicly announced, reports Hhotel Management.
In recent The Serviced Apartment Sector in Europe: Alive and Kicking expert survey found an “impressive” increase in revenue per available room across the sector in Europe.
"Hotel operators are watching competition grow as the serviced apartment sector becomes increasingly large," the report notes.
The survey shows that the apartment market is increasingly similar to the hotel segment, using consumer-oriented designs and models.
While apartment operators say their biggest challenge is competition from hotels, growing demand for the segment and interest from investors has nearly doubled the size of the market across Europe.
Market leaders
The market growth has already prompted some operators to update their brands. For example, in January, Yotel launched the YotelPad brand — “compact homes” — and is already present with it in the US, Europe and the Middle East.
This growth has also led to the emergence of fashion brands, including Cuckooz Nest, which offers childcare services; and apartments aimed at sporty guests, Cotels 7Zero1. Staycity has also launched a new premium brand for city centres around the world: Wilde Aparthotels by Staycity opened in London in April this year. The brand will be coming to Edinburgh next year, followed by two properties in Berlin in 2019/20 and another in Manchester in 2020.
According to the survey, the top three brands in terms of further expansion are Adagio Aparthotels, Staycity and Saco.
Adagio, a joint venture between AccorHotels and Pierre & Vacances, accounts for a third of the total market volume planned for introduction over the next five years.
"The past year has seen a real consolidation of this industry, which has now found its place in the investor community. The ongoing positive trend demonstrates increased demand and need for this type of product, as well as growing investor interest in this real estate asset class," the report says.
In which countries will the segment actively develop?
According to the survey, more than half of respondents plan to open new facilities in France and the Netherlands, and the United States and Eastern Europe are just beginning to appear on the list. However, most operators said they wanted to focus their presence on markets they already operate in. Including Germany, Great Britain and Western Europe.
London remains the best market for development in the UK, accounting for just under 40 per cent of total apartment supply across the country. Manchester is also popular, accounting for 25 percent of the segment.
Germany was ranked as the second country when it comes to the operator's choice of destinations for further expansion, with the cities of Hamburg, Berlin and Munich mentioned as key locations.
Some respondents said they were considering expansion in Austria and Poland.
Five-year plans
The European market will soon be replenished with 18-20 thousand apartments, which is close to doubling the volume. This marks a new record for the industry. By the end of the year, 16 percent of the total volume of properties planned for delivery will be opened, but by 2019, more than a quarter should be opened. By 2020, another 38 percent of the announced volume of apartments will be launched, 13 percent in 2021 and 6 percent in 2022. The planned projects involve from 25 to 457 apartments in one complex, on average, only 134 properties will be delivered.
Source: trn-news.ru
