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Most serviced apartment and aparthotel inventory sits with landlords, developers and investors who have little interest in running the day-to-day business. It’s why the industry is so fragmented, and so hard for local authorities to get a consistent handle on. This week’s openings and investment opportunities all sit on top of that same fragmented base, but instead paint a picture of consolidation.
On the openings side, City Pop is set to make its UK debut with a 34-unit property in Fitzrovia, bringing the operator’s European portfolio past 3,000 units across 25 buildings. Wilde, meanwhile, has opened its second Portuguese property in Porto and will follow with a 120-unit aparthotel in Amsterdam come September. Brand consistency, which has supported the development of a professional product, is what differentiates the modern operator, and what effectively allows established players to scale across multiple cities and countries.
For the same reason, institutional investors are increasing their capital allocations in the sector. M&G Real Estate’s first serviced apartment investment – two Livory-developed assets in Berlin and Bielefeld for €73.5 million – is a prime case in point. With the real estate now held by M&G, Livory’s sister company smartments will operate both properties on a 20-year lease.
The exact same logic is likely to play out with two acquisition opportunities sitting on different ends of the risk spectrum. Colliers is marketing Supercity’s Manchester aparthotel – a trading, stabilised asset – for £15 million. Here, we might see investors looking to get exposure to the sector without taking on operational risk, keeping the existing Supercity flag and management in place; equally, there’s potential for re-flagging with the new owner appointing an operator of their choosing.
At £30 million, Derwent London is selling an office building with consent for a 341-studio C1 conversion, but no operator yet attached. It narrows the buyer pool considerably; this is a play for developers and investors with the appetite and expertise to deliver a scheme from scratch. While the risk profile is much higher, market activity clearly indicates appetite for growth.
Which brings us to The Other House, also in London, where an award-winning concept is being dismantled to make way for something that doesn’t yet exist. Pro Auction’s clearance of more than 2,000 items from the South Kensington property (the entire contents of 11 Victorian townhouses), is in preparation for a new luxury wellness brand led by AENDRE Group, Lifestyle Hospitality Capital, and One Investment Management. Brand strength is the thread that ties this week’s stories together, with value ultimately resting on which name ends up above the door.
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The brand advantage
Most serviced apartment and aparthotel inventory sits with landlords, developers and investors who have little interest in running the day-to-day business. It’s why the industry is so fragmented, and so hard for local authorities to get a consistent handle on. This week’s openings and investment opportunities all sit on top of that same fragmented base, but instead paint a picture of consolidation.
On the openings side, City Pop is set to make its UK debut with a 34-unit property in Fitzrovia, bringing the operator’s European portfolio past 3,000 units across 25 buildings. Wilde, meanwhile, has opened its second Portuguese property in Porto and will follow with a 120-unit aparthotel in Amsterdam come September. Brand consistency, which has supported the development of a professional product, is what differentiates the modern operator, and what effectively allows established players to scale across multiple cities and countries.
For the same reason, institutional investors are increasing their capital allocations in the sector. M&G Real Estate’s first serviced apartment investment – two Livory-developed assets in Berlin and Bielefeld for €73.5 million – is a prime case in point. With the real estate now held by M&G, Livory’s sister company smartments will operate both properties on a 20-year lease.
The exact same logic is likely to play out with two acquisition opportunities sitting on different ends of the risk spectrum. Colliers is marketing Supercity’s Manchester aparthotel – a trading, stabilised asset – for £15 million. Here, we might see investors looking to get exposure to the sector without taking on operational risk, keeping the existing Supercity flag and management in place; equally, there’s potential for re-flagging with the new owner appointing an operator of their choosing.
At £30 million, Derwent London is selling an office building with consent for a 341-studio C1 conversion, but no operator yet attached. It narrows the buyer pool considerably; this is a play for developers and investors with the appetite and expertise to deliver a scheme from scratch. While the risk profile is much higher, market activity clearly indicates appetite for growth.
Which brings us to The Other House, also in London, where an award-winning concept is being dismantled to make way for something that doesn’t yet exist. Pro Auction’s clearance of more than 2,000 items from the South Kensington property (the entire contents of 11 Victorian townhouses), is in preparation for a new luxury wellness brand led by AENDRE Group, Lifestyle Hospitality Capital, and One Investment Management. Brand strength is the thread that ties this week’s stories together, with value ultimately resting on which name ends up above the door.
Subscribe to the SAN newsletter for weekly industry insights here.
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