Friday, 24 February 2017

Furnished Apartments in Berlin, the Answer to Growing Demand and Tighter Regulations

The Demand for Furnished Apartments

In the ever-changing world of work, often involving flexible locations, it is becoming more and more important that we can easily find a fully-equipped living space, ready to move into and easy to call home. Furnished living concepts are a response to this growing trend. Providers of this concept say that in 2016, every 5th space was occupied by a ‘commuter’ – someone who might only live in Berlin during the working week. In addition, fixed term contract jobs have significantly increased with this defined time span a matching comfortable living space in a given location is needed. Who wants to go find an apartment, furnish it, only to dismantle everything after 6 or 12 months? Providers of such accommodation are flexible regarding the rental period from 1 month to a year or more, and some contracts can be open ended. There is a growing preference for a furnished apartment solution over serviced apartments or hotels.

 Recent projects were developed in the light of the fact that there is an urgent need for affordable living space in Berlin. It is expected that around 250,000 people will be relocating to the city by 2030. Already, 83 percent of New Berliners live alone or in pairs. The rise in single households is twice as large as in comparable large cities.

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The Ideal Location for Furnished Apartments

For the concept to be successful avoiding longer vacancies the location is a key factor:

  • Close proximity to professional clusters with sufficient demand
  • Well connected by public transport;
  • Shops, restaurants at least for daily needs.

The Best Planning Concept

To achieve the best cost/benefit ratio for the users as well as for the owner these planning parameters should be adhered to:

  • Compact, affordable living space with a choice of apartment size of 1.5 to 2 rooms
  • Apartment sizes from 30m² to 60m²
  • Fully equipped kitchen
  • Modern “clean” furniture and decorations
  • Smart TV, Wifi and smart metering.

Recommended Operational Concept

For an investor, it could turn into a long and in parts painful experience to try to achieve a smooth set-up and operation of a furnished apartment unless he lives “around the corner” and is flexible regarding availability. A service concept from the outset is important. It should cover these items:
  • Furniture concept, delivery, and installation
  • Service for rental, management during the occupation and most important handover from the tenant
  • Maintenance and replacement of furniture and equipment.

In order for a service provider to be efficient and successful, they should have a number of managed apartments in the vicinity.

Example for a Suitable Location for Furnished Apartments

One such area ideally suited to furnished apartments is the vicinity of the Science and Technology Hub Berlin Aldershof, an important science, business and media centre in Berlin. It includes ten non-university research institutes, six institutes of the Humboldt University. and some 1,000 additional companies, where ca. 16,500 people are employed and more than 8,000 students are registered.

In addition, the area has attracted 146 companies in the media sector, employing another 1,763 people.

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