SMARTments business success story in Germany celebrates 10th anniversary – Intensified expansion course with the goal of doubling the number of units by 2027

Berlin, 6 October 2023: The German serviced apartment brand SMARTments is celebrating its 10th anniversary and intensifying its expansion. After the brand's first property opened in Hamburg near the Außenalster in 2013, the portfolio of the brand of project developer GBI Group currently comprises eight properties in operation in Germany and Austria. At the Expo Real Trade Fair in Munich, another location decision was announced for Bielefeld with 223 units directly at the main railway station; the building will be completed in 2025. This means that in addition to 1043 serviced flats that are open, a total of 650 units are under construction in four buildings. "Overall, we’re planning to double the portfolio to about 3600 units by 2027," announces Burak Ünver, Managing Director of SMARTments business.

For Reiner Nittka, CEO of the GBI Group, the success story of the serviced apartments shows how right the decision was to expand the range of real estate developments and to take over the operation of the properties: "At that time, this type of long-stay accommodation was hardly known in Germany. But intuition and market research were right. Since then, the influx of guests to the properties has been steadily increasing. Even Corona and periods of economic weakness have only caused minor dents, especially compared to the classic hotel industry," says Nittka. In 2022, a record operating profit was achieved with an occupancy rate of more than 80 per cent, although Corona restrictions still had to be observed in some cases. "Currently, we are increasing our average daily rate (ADR) by more than 20 percent compared to the previous year,”  Burak Ünver cites the latest figures. These apply to the three SMARTments business in Berlin, the two houses in Vienna as well as the other locations in Hamburg, Munich and Mannheim. Ünver: "Thanks to these good results, we are also well over budget for 2023."

In the accelerated expansion, SMARTments will increasingly rely on the takeover of existing houses and portfolios, both of classic hotels and other long-stay accommodation, in addition to its own developments of the GBI Group. Pure lease agreements with other project developers and portfolio holders are also possible," Ünver explains: "This development of a multi-expansion strategy is a reaction to the changed market situation. We are in an excellent starting position for the changed challenges and are also adapting our structures very specifically for this purpose."

Two of the four serviced apartment buildings under construction are also part of SMARTments' recent diversification of its product range. In addition to classic SMARTments business, where kitchenettes are integrated in every flat, the serviced flat offer will also include SMARTments connect in the future. In the new SMARTments connect offer, shared kitchens are planned for some of the flats, supplemented by opportunities for co-working and co-living.

In the newly announced house in Bielefeld, 67 of the 223 flats will be built without their own kitchen. "With this, we are primarily addressing young professionals," says Ünver. This group of guests has a special need to meet people in an uncomplicated way after returning to their accommodation, even when travelling for work, without having to give up a private retreat there. "This creates a community that makes it easier to settle into a new city," says Ünver. In Bielefeld, a photovoltaic system is used to generate its own electricity. This sustainability enabled certification according to the KfW 40 standard..

GBI CEO Reiner Nittka also points to the importance of the financially strong private real estate fund manager Henderson Park as a new shareholder of the group of companies in the expansion strategy. Mixed-use properties will also gain in importance. "In these developments, serviced flats are combined with other types of use, often from the SMARTments family," says Ünver.

The significant expansion of SMARTments will also be interesting for investors. In the past, insurance companies such as Hanse Merkur Grundvermögen and Württembergische, the investment company Catella, a professional pension fund and a private equity company have invested. The houses under construction in Frankfurt were acquired by abrdn Investments Deutschland AG (SMARTMents connect) and Hanse Merkur Grundvermögen (SMARTments business). "Institutional investors focus on serviced flats not only because of the long-term leases and rental agreements, usually of 20 to 30 years, but also because of the successful bottom line," says Burak Ünver: "Accordingly, our owners have never had to record rent defaults, and lease payments have always been made without restrictions."

About SMARTments:
"SMARTments business" and "SMARTments connect" are brands of the GBI Group and offer travellers fully furnished and fully equipped flats, with "SMARTments business" including its own kitchenette, and "SMARTments connect" additionally integrating communal kitchens. Mostly, it is business travellers or young professionals who use serviced apartments for longer stays in a city, for example for project work or consulting mandates. But private travellers also use serviced flats of the GBI brands - for example for city trips or to arrive in a foreign city and look for a new flat from there at their leisure. Eight properties of the "SMARTments business" brand with a total of 1043 flats in Munich, Hamburg, Berlin, Mannheim and Vienna are currently in operation. In addition, around 300 flats are under construction in Frankfurt am Main and Hamburg. For the "SMARTments connect" brand, two buildings with 350 flats are currently under construction, in Frankfurt and Bielefeld. The operation of the two serviced flat brands also takes place independently of real estate developments of the GBI Group. http://www.smartments-business.de

About the GBI Group:
GBI is a real estate developer focusing on subsidised and privately financed flats, hotels, serviced flats, student flats and assisted living concepts under the SMARTments brand. Since its foundation in 2001, GBI has sold real estate projects in Germany and Austria with a volume of over 2.5 billion euros. GBI also operates serviced and student flats itself under the SMARTments brand. GBI Capital, which is part of the GBI Group, bundles the areas of investment management, fund and asset management and subsidy consulting. GBI's shareholder is the private real estate fund manager Henderson Park from Great Britain. http://www.gbi.ag 

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