International real estate advisor, Savills have identified Dublin, Stockholm, Amsterdam, Berlin and Barcelona as the top five ‘opportunity’ markets for expansion of the serviced apartment (also known as the ‘Extended Stay’) sector across Europe.
Dublin, Stockholm, Amsterdam, Berlin and Barcelona were all ranked highly due to them having sizeable corporate and overseas visitor markets with strong outlook in terms of GDP and employment growth. But more importantly they also had very constrained stock levels relative to their overnight visitor market.
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 within what is a relatively immature asset class on the continent.
In order to identify the new opportunity markets for this sector, the Savills research team analysed the following factors within a matrix of 35 European cities - the presence of large corporates, GDP and employment growth forecasts and overnight visitor market and supply drivers (current stock relative to overnight visitor including that of hotels) for the sector.
Commercial research director at Savills, Marie Hickey says, "We anticipate that evolving consumer trends of millennial business travellers and the success of AirBnB in highlighting alternative accommodation options, such as Extended Stay, across Europe will help the sector further tap into existing unmet demand."