- Major joint venture established to raise capital for the acquisition and conversion of obsolete assets into serviced apartments
- Joint venture is targeting a GDV in excess of £400 million for initial development pipeline
- Partnership is targeting UK and key European markets to deliver up to 2,000 apartments exclusively for Bob W brand
- Comes amid growing demand for more flexible, high-quality accommodation options
LONDON 19 July 2024 – A new joint venture between Bob W, the tech-powered hospitality operator, and Osborne+Co Investment Management (OCIM), the in-house investment management arm of global build-to-suit developer and investor Osborne+Co, has today announced the launch of a £120 million equity raise to acquire and repurpose hotel and office assets into high-quality short-term serviced apartments.
The £120 million value-add fund will mirror OCIM’s European footprint of offices, targeting key European markets including Ireland, Portugal, Spain, Poland and the UK. The joint venture plans to transform 20-25 buildings into 1,500 to 2,000 modern apartments and is targeting a GDV in excess of £400 million for its initial development pipeline. The partnership – which is actively seeking an investment partner – expects its first assets to be operational within 18 months.
By identifying obsolete or underperforming existing assets, the joint venture will maximise asset performance and significantly enhance overall property value across the new portfolio. This strategy also delivers considerable environmental upside through the adaptive re-use of existing buildings and reducing the portfolio’s overall carbon footprint. The refurbished assets will be further optimised for operational efficiency, including enhanced insulation and other energy-saving features.
The strategic partnership with OCIM aligns with Bob W’s commitment to sustainability. As the world’s first international climate-neutral hospitality provider, Bob W sources secondhand furniture, uses 100% renewable energy and double offsets its emissions.
The joint venture will leverage the strengths of both companies to deliver this rollout, increasing its presence in strategically important markets. and providing high-quality and tech-enabled serviced apartments, with Bob W operating all assets developed under the partnership.
Niko Karstikko, Co-founder of Bob W, said: “This strategic partnership marks a major milestone for Bob W, enabling us to merge our cutting-edge, tech-driven hospitality solutions with Osborne+Co’s extensive expertise in real estate development.
“Together, we aim to transform underutilised spaces into vibrant, high-quality serviced apartments that meet the evolving needs of modern travellers. This partnership will enable us to deliver not only significant value for stakeholders, but also an authentic five-star hospitality experience for our guests as we continue to build a pan-european household name as the new elevated standard of hospitality for the next generation of travellers.”
Denis McGowan Partner at Osborne+Co, said: “Partnering with Bob W on this venture is a remarkable opportunity to harness the current surplus and availability of assets in the office sector and underinvested assets in the hospitality sector in the UK and key European markets. By repurposing hotels and office buildings into high-quality, sustainable serviced apartments, we will meet the growing demand for flexible and premium accommodation. We look forward to leveraging our development capabilities and Bob W’s hospitality excellence to create spaces that resonate with today’s discerning travellers and set new standards in this rapidly-growing industry.”
Rishi Khurana, co-founder at OCIM, said: “The joint venture is seeking an investment partner to create a pan-European platform to deliver attractive returns in a highly defensive asset class. We have seen recent exits in both single assets and operational platforms that demonstrates the liquidity of the Serviced Apartment asset class.”
Serviced apartments are one of Europe’s fastest-growing asset classes, driven by increasing demand for flexible, high-quality accommodation options. Research carried out by Bonard last year found that the serviced accommodation sector is worth £1.7bn to the UK economy alone, directly supporting 6,050 jobs.
Growth is being fueled by a combination of factors including the rise of remote work, the post-Covid resurgence of business travel, growing demand for more spacious and self-contained lodging and higher vacancy rates in office markets across Europe. As a result, serviced apartments offer attractive investment opportunities with strong potential for long-term ROI.
As one of Europe’s best-ranked international hospitality brands, Bob W operates across 29 European cities today. The company currently boasts a Net Promoter Score (NPS) of 77 and an average guest rating of 4.7 out of five stars across the main review platforms.
Backed by apps that provide a seamless digital front desk and robust customer service, guests can easily select super-early check-ins or late check-outs based on live availability and have access to the mainly chat-based perfect host ‘Bob W’ for recommendations and local tips.
The operator’s ‘marketplace’ also connects guests to local breakfast spots, gyms, facilities, and a host of digital products to ensure a truly local experience.
Launched in 2011, Osborne+Co has delivered over £6bn projects as a developer and landlord. The firm works on a cross-border basis with co-investment capital across a series of thematic and sector-led investment strategies, leveraging its deep understanding of corporate occupiers and strong in-house delivery capability. Recent projects include Santander’s UK Headquarters, in Milton Keynes, which completed in November 2023 and the JPMorgan Chase European Technology Hub in Glasgow, which completed in April this year. Globally, Osborne+Co has created and developed inspiring spaces across 4 continents and 25 countries.
