Serviced apartments gain momentum among investors and developers

The new HVS report for 2026, based on a sample of approximately 13,000 properties across Europe, depicts a sector that is evolving from a niche hospitality product into a distinct investment asset class, with its own cost structure, operating model, and performance characteristics.

Interest is being driven not only by hotel operators but also by institutional investors, private equity funds, and real estate developers seeking new ways to unlock the value of property assets amid rising construction costs and increasing pressure on investment returns.

In 2025, occupancy levels remained close to 80% across most European markets, confirming that demand for extended-stay accommodation continues to be robust. However, average daily rates (ADR) declined in almost all markets, resulting in lower revenue per available room (RevPAR).

In the United Kingdom, London continued to outperform the rest of the country, recording a modest increase in occupancy. Nevertheless, the correction in room rates offset much of the growth momentum that had built up in previous years.

A similar trend was observed in Paris. The return of corporate demand following the 2024 Olympic Games supported occupancy levels, but room rates reverted to more normalized levels after the surge generated by the global sporting event.

Pipeline of Nearly 20,000 New Units

The European serviced apartment sector continues to expand at a strong pace.

According to HVS, approximately 19,800 new units are expected to become operational across Europe by 2031.

Germany accounts for 23% of the upcoming supply, while the United Kingdom represents 22%. In the UK, 57% of new development is concentrated in London, whereas in Germany the principal growth markets are Berlin, Munich, and Hamburg.

Approximately one-quarter of the new supply will operate under an international brand.

Staycity has the largest development pipeline in Europe, with approximately 5,000 units, around 70% of which will operate under the Wilde brand. Limehome follows with approximately 2,200 units across 43 projects, supported by a strong presence in Spain and significant expansion in Germany. Marriott ranks as the third-largest player through its Residence Inn, StudioRes, and Apartments by Marriott Bonvoy brands, while Hilton is gradually introducing its Home2 Suites brand across Europe.

The Model Is Gradually Gaining Ground in the Greek Market

Although Greece has yet to feature among the largest markets in Europe’s development pipeline, the first wave of investments indicates that the serviced apartment model is steadily gaining traction.

A key market participant is DKG Development, which has partnered with Limehome to create a portfolio of between 2,500 and 3,000 serviced apartments in Athens and Thessaloniki.

The market has already seen the development of projects such as IRIS, OLIVE, and Athens Corporate Housing, while IRIS in Piraeus is among the largest serviced apartment complexes in Greece.

At the same time, Blend Development has completed the conversion of a former office building in the Omonia district into a 32-unit serviced apartment complex managed by Limehome. The transaction is widely regarded as a representative example of how obsolete office buildings can be successfully repositioned and repurposed for new uses.