Growth market: Serviced apartments

Economics serviced apartments 5

The blurring of the lines between residential and hospitality in the emerging serviced apartments segment and examine the design considerations and cost factors that developers should take into account

01 / A growing subsector with good returns

The serviced apartment sector is “the saviour of the commercial use classes”, claims Ben Davis, director at property company Saxbury, which specialises in the sector. As commercial and prime residential real estate starts to look less attractive, investors familiar with the benefits of long-term investments in the private rental sector (PRS) are jumping into the wide and varied serviced apartments market. With plenty of room to expand before UK supply levels catch up with mature markets, strong demand and a solid business case for further supply, the sector expects significant growth. Developers and investors would do well to consider the flexibility and profitability of the segment as they search for better uses for planned commercial and residential assets struggling to achieve viability.

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