More profitability and reliability: ‘Business apartments’

Silvia Castro Betancourt

September 23, 2019

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This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

Rental of these properties is 27% more profitable than the traditional one and offers greater reliability to the owner. The internationalization of large companies and the rise of technology have boosted the demand for these types of apartments.

Tourist apartments, rooms for rent or student apartments. Investors are looking for new ways to make their assets more profitable and have found their new ally in rent. Business apartments have been the last to break into real estate and both consultants and fund managers have joined the trend.

“Renting apartments for corporate is 27% more profitable than the traditional one,” says Ángel Mayoral, CEO of Homyspace. Business apartments do not require a tourist rental license and offer a "greater reliability to the owner", since it is the company that takes care of the payment.

Established in 2016, this proptech offers corporate temporary rental services for its displaced employees. In the last two years, the company has managed the lease of more than 2,000 homes. The company offers more than 14,000 accommodations and is present in Portugal and France, with the intention of opening soon in Italy and the United Kingdom. "Without a doubt, renting apartments for entrepreneurs is an upward trend," Mayoral says.

"In the case of traditional rental, large building owners have to commit seven years of income," says aTemporal's managing partner, Nacho Martínez-Fortun. The company, part of the aFinance group, has emerged precisely in response to the seasonal rental boom. "It's a poorly exploited market," he says.

Corestate has been one of the precursor companies in the market. In March last year, the Luxembourg fund manager launched Joyn, a brand of real estate exclusively for executives traveling to other cities for a relatively long period of time. The company intends to open three of these buildings in 2019, two of them in Madrid and one in Barcelona, ​​with approximately 200 beds each.

"These properties allow to work more efficiently," the company sources told EjePrime. In addition, they have common areas to promote networking and meet the rest of tenants. Joyn already has a tour in the German market, with two properties in Munich that opened their doors between December 2018 and January this year.

Madrid Office is another of the companies that have opted for this trend. “The offer is transforming and is increasingly focused on the needs of professional groups,” says Julián Abelló, General Director of the company. The company has four coworking centers in Madrid. One of them has a two-room apartment for workers. “We give a complete service and offer an added value to those whose companies have their headquarters outside of Madrid,” adds Abelló.

The trend towards the internationalization of large companies is precisely one of the reasons for the growth of business apartments, according to the CEO of Homyspace. To this factor we can add the rise of technology and the optimization of costs since, according to Mayoral, hosting an employee for three months in a hotel is up to 60% more expensive than doing it in an apartment.

In Barcelona, ​​for example, the international projection of the city is also involved, according to aTemporal's managing partner. “The Catalan capital creates more and more business schools and attracts more technology companies,” says Nacho Martínez-Fortun. “This migratory flow of people requires accommodation support,” he adds.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.