Savills has identified Dublin, Stockholm, Amsterdam, Berlin and Barcelona as the top five ‘opportunity’ markets for expansion of the serviced apartment sector across Europe.
According to Savills, €416.5m was invested into Europe’s Extended Stay sector in 2015, a year-on-year increase of 32.9%.
The majority share (90%) was invested into the UK, with Germany (7%), Switzerland (2%) and Belgium (1%) at the forefront of activity.
For the research, Savills analysed three main factors in 35 European cities; the presence of large corporate; GDP and employment growth forecasts; overnight visitor market and supply drivers for the sector.
Dublin, Stockholm, Amsterdam, Berlin and Barcelona were ranked highly due to them all having sizeable corporate and overseas visitor markets with strong outlook in terms of GDP and employment growth.
More importantly they also had very constrained stock levels relative to their overnight visitor market.
“Those markets where the demand/supply fundamentals are the most robust present the greatest opportunity,” comments Marie Hickey, commercial research director at Savills. “These five key gateway markets in Europe continue to offer expansion opportunities as they have some of the strongest underlying performance fundamentals which will in turn help to drive demand for ‘extended stay’ accommodation.”
Richard Dawes, associate director in the Hotels team at Savills, adds: “The growing awareness around the sector, the brands and the stable operational model is capturing greater levels of third party investment and developer appetite, thus we expect these core European cities to welcome strong levels of investment in the Extended Stay sector over the next few years albeit the lack of investable stock remains a constraint.”