Serviced flats have been one of the strongest growth segments in the hospitality market in Germany and Europe for more than 20 years. They benefit from megatrends such as urbanisation, individualisation and digitalisation, from growing target groups for stays of one night to six months and from their lean operating structures. The largest European markets include the UK at the top, followed by Germany and France. In Germany alone, there are currently 50,200 serviced flats with a pipeline of 24.5 per cent by the end of 2026 (as at 31.10.2023, Apartmentservice).
The recently published white paper “Potential analysis of the serviced flat market” offers investors, project developers and operators a detailed insight into the location qualities of the serviced flat segment in Germany and Europe. Apartmentservice was commissioned by Union Investment to analyse a total of 40 cities, mainly German A to D cities and selected European metropolises, based on the demand for overnight accommodation and the current location-specific supply of this form of accommodation.
“Our white paper shows that the opportunities in the segment remain immense. The combination of strong business figures from serviced flat operators and the still very high potential shown in many locations is a clear guarantee for dynamic growth in the future,” says Henrik von Bothmer, Head of Operated Living at Union Investment.
Berlin to Würzburg.
In Germany, even and especially in the largest serviced flat markets in terms of numbers, Berlin and Munich, there is still clear to strong development potential for further serviced flat units. In a national comparison, Berlin clearly ranks at the top with only 40 per cent market coverage. In total, a potential of around 41,500 serviced flat units was identified in all German cities analysed. The twelve most attractive top A, B, C and D cities were analysed in more detail, including hidden champions such as Hanover, Würzburg and Münster.
“The analysis shows that serviced flats now work in any location where large companies are located and there are few flats or modern hotels,” explains Anett Gregorius, founder and owner of Apartmentservice. “The exceptions are locations with a mono-focus and, of course, A to D locations that have grown too much in recent years and are now showing signs of saturation. We have also identified these in the white paper.”
London to Berlin.
In a European comparison of potential, London has the largest range of serviced flats and at the same time the greatest development potential across all 40 cities analysed. This is followed by Paris, Madrid and Berlin in 4th place in the potential ranking. With just under 6,300 serviced flats, Vienna has the second largest number of serviced flats in a city after London, but also has significantly less potential than comparable A-cities.
Source: Whitepaper by Apartmentservice and Union Investment highlights enormous further potential of the serviced flat market in Germany and Europe
