Asset classes · Serviced apartments
Fox Capital advises owners and developers on the sale of serviced apartments, boarding houses and apartment buildings to specialist funds, institutional investors, family offices, operators and living platforms.
Fox Capital GmbH is an independent, owner-managed advisory firm for real estate transactions, financing, corporate finance and M&A. In serviced apartments, we advise on operating assets, new builds and developments from a transaction volume of EUR 10m – as single assets or portfolios, off-market or in a structured bidding process.
Serviced apartments sit between hotel and residential. Buyers therefore assess not only location and space, but lengths of stay, occupancy, the make-up of all-in rates, the operating cost structure and the type of operation – self-operation, management agreement or lease.
The buyer universe is specialised. Broad marketing generates enquiries but not automatically robust bids. What matters is a targeted approach to parties whose acquisition criteria match the location, product size and operating structure.
Value drivers
Longer stays reduce re-letting and service costs; shorter stays can achieve higher nightly rates but require more staff. Buyers therefore test which length of stay an asset actually achieves – and the costs involved.
Value depends less on square metres than on income per apartment and per available night. Occupancy, rate level and additional revenue from services, cleaning or utility fees should be reported separately so that an investor can follow the calculation.
The comparison with a full-service hotel is quickly drawn. Which services are actually provided, priced and paid for determines sustainable income – and whether the reported margin holds in operation.
Self-operation, a management agreement or a lease fundamentally change the risk profile. Remaining term, fee model, termination and change-of-control rights, reporting and data access should be clarified before marketing starts; the legal assessment of an individual case belongs with qualified lawyers.
Proximity to employment clusters, trade fair and conference venues, public and long-distance transport, and hospital or project locations determines which target groups an asset can realistically reach. Everyday infrastructure influences how long guests and tenants stay.
Apartment buildings with residential-style layouts, own kitchens and long stays can more readily be repurposed as residential or micro living. This flexibility widens the buyer universe and can limit a discount for operator dependency.
Process
Capture unit schedule, occupancy, lengths of stay, cost structure, operating model, planning status and technical condition.
Market-based valuation on sustainable operating income and definition of the target group and suitable buyer universe.
Asset or share deal, off-market or bidding process – aligned with timetable, confidentiality and tax review by your advisors.
Targeted, discreet approach to parties that actually acquire in the living and hospitality segment.
Complete, indexed data room after signing of the non-disclosure agreement.
Comparison of price and deal certainty, management of due diligence through to signing.
From practice
An asset that is meant to be student housing, serviced apartment and conventional residential at the same time appears unconvincing to specialist investors. The answer to who stays there and why belongs at the start of the materials.
Showing only an all-in rate without reconciling costs leaves the buyer uncertain. If FF&E planning is also missing, buyers often deduct future replacement needs as a lump sum.
A management or lease agreement whose fees, term, termination rights and transferability are not immediately clear moves the negotiation into due diligence – and there often onto price.
An annual average hides monthly fluctuations. Buyers therefore review the monthly view with lengths of stay and rate development; without it, income cannot be verified reliably.
Questions
The points owners raise before a mandate — answered the way we would in a first call.
Depending on size and structure, relevant buyers include living and hospitality funds, institutional investment managers, family offices, private equity, specialist living platforms, joint ventures and operators with their own or affiliated capital. For larger portfolios, platform suitability gains importance, because the investor acquires not just an asset but a repeatable product.
The basis is usually sustainable operating income: revenue from occupancy and rate level plus ancillary revenue, less the operating, staff, service and maintenance costs actually required and reserves for FF&E and capex. For leased or managed assets, contract term, fee model and operator covenant are added. Whether an asset is classified as residential or accommodation influences the buyer's underwriting approach; the assessment of an individual case belongs with qualified specialist advisors.
The focus is on year-round occupancy, average length of stay, rate per night or per month, revenue per available unit, the cost ratio per service area, staff and cleaning costs, and FF&E and capex needs. For lease models, rent cover and remaining term complete the picture.
Both products are operationally driven. Micro living targets small, furnished units for mobile target groups with partly short tenancies; serviced apartments and boarding houses focus more on guests and tenants with short to medium stays and a defined scope of services. For a sale, what matters is which target group an asset actually reaches and what that operation costs.
Yes. Particularly with ongoing operations, an off-market sale to a few vetted parties is often sensible because it avoids unsettling guests, tenants, staff and operator. An anonymised teaser goes only to suitable parties; details follow after an NDA. A structured bidding process creates more price competition but requires a sufficiently large buyer universe and thorough preparation.
Documents
Further reading
Buyer universe
Depending on the contract model, serviced apartments are underwritten like hotel or like residential real estate. Lease, management or self-operation determine which investors can acquire the asset under their guidelines.
Asset classes
We advise on real estate and corporate transactions from EUR 20m across Europe, with a clear focus on the DACH region. Every asset class has its own buyer universe – these are the segments we work in most often.
Send us the key figures — you get an honest read on price and buyer universe.
