The smaller, the more lucrative
For the new report of the Micro-Living Initiative, we interviewed operators: for example about the increased energy costs, their marketing efforts and the status of their business after Corona. The report also contains extensive best-practice recommendations for the operation and construction of residential flats.
To flip or not to flip? The massive increase in energy costs is causing headaches for operators of flats in the micro-living and temporary housing segment. Most of them calculate an all-in rent, which has become the standard in this segment. For the new market report of the Initiative Micro-Living (IML), we asked the operators what they plan to do - most of them want to pass on the higher costs to the tenants. The subject of energy costs is one of several topics in the survey. It is already the fifth market report. This time we evaluated about 24,000 residential units in 117 apartment buildings. The report shows how the industry is doing.
The most important results: The average monthly all-in rents are around 543 euros, ranging from around 258 to 1,140 euros and reflecting the great heterogeneity of the properties in terms of property and location qualities, flat sizes and the respective city and tenant clientele. Compared to autumn 2021, the rents of all members have risen by an average of approx. 1 %. It should be noted, however, that the portfolio composition has changed, especially compared to the last edition. The changes in value cannot therefore be explained purely by market developments. Students are an important target group for flats, accounting for about 42% of all tenants, but by no means the only one. Some apartment buildings actually do not have a single student as a tenant. Compared to autumn 2021, the proportion of students has remained stable. On a positive note, the occupancy rate has stabilised compared to autumn 2021 at an average of 85%. It is also noticeable that the range of occupancy rates per apartment building has narrowed somewhat, but still remains quite high, which indicates that not every flat concept performs well at every location. However, this occupancy rate tends to require increased marketing efforts and property management that is even more focused on target group needs.
The current survey showed that, despite all crises and caesurae, there is general optimism among participants for the future of residential apartment buildings. Nevertheless, most members do not expect "business as pre-COVID" until 2023 at the earliest. With regard to rent increase possibilities, the participants of the IML predominantly assume rates of increase slightly below the current very high inflation rate. Here, values of nominally 2 to 4 % p.a. and 4 to 6 % are the most frequently mentioned answer categories.
Best practice recommendations for the operation and construction of apartment buildings
As part of the data collection for this edition, almost all participants in the IML also took part in a survey from which best practice recommendations for the operation and construction of residential flats are formulated, for example:
- Measures to achieve permanently high occupancy rates
- Recommendations for the construction of an apartment building
- Recommendations for the construction and maintenance of common areas and furnishings
- Recommendations for services within an apartment building
- Investment costs for the flats
Note: You can download the market report of the Micro-Living Initiative free of charge here: https://initiative.bulwiengesa.de/micro-living/
Contact: Felix Embacher, Chief Representative at bulwiengesa, embacher@bulwiengesa.de
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