locations,” Carrie says. Additionally, ensuring compliance with safety and quality standards is crucial, but can add to operational costs. 3Sixty addresses these issues by leveraging technology for efficient sourcing. It maintains strict vetting processes and offers transparent pricing models.
ASIA SHOWS GROWING DEMAND FOR SERVICED APARTMENTS Outside the US, operators in regional markets face their own unique challenges and drivers for growth. In Europe, demand for flexible accommodations is rising due to increased business travel and remote work. Conversely, conflict in the Middle East is creating safety challenges in previously stable areas. “In Asia, we are seeing a big uptick in demand for
longer-term stays and relocations, as more companies move to establish business hubs in the region,” Carrie says. “India is becoming a top destination for corporate relocations and business travel, surpassing China and its more measured approach to easing Covid-19 restrictions and cooling US-China relations.” India’s stronger position is attracting an increasing
number of foreign businesses eager to tap into the country’s robust talent pool. This has led to a significant rise in demand for business travel accommodation in key cities like Bangalore and Hyderabad. “What’s really interesting when we delve deeper into
the data is the noticeable drop in expat travel and rise in intra-country moves,” she says. “Our data indicates a 30% decrease in international relocations and a 35% increase in intra-country relocations among our largest clients over the past two years. This shift demonstrates how international companies are now prioritising local hires over international expats, largely due to the high- quality talent pool in key markets like India, which excels in technology, engineering and medical science sectors.”
A BRIGHT FUTURE FOR EUROPE? The 2024 Global Serviced Apartment Report GSAIR, published in June, depicts a sector that is facing challenges, but also has great opportunities. It points to increases in interest rates, building rates and rising regulatory demands, which are impacting margins and discouraging new builds. In addition, the report says the relocation market remains subdued and corporate travel demand has softened. Post-pandemic reviews and a focus on sustainability have led to fewer but longer stays, while environmental, social and governance (ESG) considerations are increasingly important. Nevertheless, as Philip Grace, chief development
officer at tech-driven serviced apartment operator Bob W, says there is an enormous opportunity for the serviced apartment sector across Europe right now. Bob W is a technology-driven serviced apartment operator that has expanded rapidly over the past few years to operate across 29 European cities today. A recent joint venture with Osborne+Co Investment Management means the company is now acquiring and converting outdated
office and hotel buildings into serviced apartments. As a sign of their confidence in the growth of serviced apartments, the new joint venture announced the launch of a £120 million equity raise to acquire and repurpose hotel and office assets into high-quality short-term serviced apartments. It will target key European markets including Ireland, Portugal, Spain, Poland and the UK and plans to transform 20–25 buildings into 1,500 to 2,000 modern apartments with the first apartments open within 18 months. Philip says the serviced apartment sector is one of
the fastest-growing asset classes in the European Union as both leisure and business travellers increasingly seek alternatives to traditional hotel rooms. “Travellers now favour amenities like kitchens and
laundry facilities and are looking to extend their stays to align with the ‘travel less, stay longer’ mindset,” he says. This means well-located serviced apartments are experiencing growing demand. “This trend sits against a backdrop of a property
landscape comprised of secondary outdated offices and hotels that would require significant investment to modernise,” Philip explains. “These ageing assets cannot deliver the returns to support the cost of debt and alternative investment opportunities. Demand is on the up, lack of supply is fuelling growth, and owners of assets – developers and investors – can achieve healthy and sustainable returns with serviced apartments.” While converted office space can provide a great
location for a new serviced apartment block, Philip says that not every office can be converted. “Converting and modernising old offices and hotels that meet the right criteria is the way forward to achieve a high financial bar and the returns required by investors,” he says. “In some European countries, office rents have become more affordable post-pandemic, but many have remained the same.”
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GLOBAL LEADERSHIP
SERVICED APARTMENTS
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