Serviced apartments evolving, according to HVS report

06 July 2015 by Katey Pigden

Urban Villa

Serviced apartments are set to make better use of technology and offer smaller units, according to a new report from hotel consultancy firm HVS London.

The research was published to coincide with this week's Serviced Apartment Summit, which will be held in London (7-8 July).

Following a survey of investors, lenders and developers, HVS concluded that many of them would be willing to participate in the growing serviced apartment sector.

However, several expressed a need for more comparative information on the performance of serviced apartments such as occupancy, average rates and operating margins.

The report said serviced apartments have gained momentum across Europe as new openings, brand activity and a number of significant transactions have raised awareness of the sector. It said the UK, Germany and France are proving to be the most interesting markets.

HVS director and report author Arlett Oehmichen highlighted that the market is moving from being a niche offer towards the mainstream, but is still evolving.

"Looking to the future we are likely to see continued changes in the offer and differences emerging between leading brands," she said. "The next generation of serviced apartments is likely to focus on better use of technology, more efficient use of space and a tendency towards smaller units. We have already seen this with Zoku, the new brand from HotelsAhead, which claims to be a home-office hybrid targeting so-called ‘bleisure' travellers."

She added: "Lenders and investors are in search of quantitative rather than qualitative information in order to fuel the growth of the market with capital."

This year the serviced apartment sector has already seen the acquisition of almost 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 Hanover's first Urban Villa in West London and CLSA's high-tech Beyonder ApartHotels brand, the first of which is due to open in London in December 2015.

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