UK: A new joint venture between tech-powered hospitality operator Bob W and Osborne+Co Investment Management [OCIM], the in-house investment management arm of build-to-suit developer Osborne+Co, has launched 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 JV plans to transform 20 to 25 buildings into 1,500 to 2,000 modern apartments and is targeting a gross development value [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 JV will maximise asset performance and significantly enhance overall property value across the new portfolio, while increasing Bob W’s presence in strategically important markets [the company will operate all assets developed under the partnership].
The strategy also aims to deliver considerable environmental upside through the adaptive re-use of existing buildings and reduce the portfolio’s overall carbon footprint. The refurbished assets will be further optimised for operational efficiency, including enhanced insulation and other energy-saving features.
Furthermore, the strategic partnership with OCIM aligns with Bob W’s commitment to sustainability. Claiming to be the world’s first international climate-neutral hospitality provider, Bob W sources secondhand furniture, uses 100 per cent renewable energy and double offsets its emissions.
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 under-utilised 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,” he added.
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,” he added.
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 £1.7 billion to the UK economy alone, directly supporting 6,050 jobs.
Growth is being fuelled 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.
Now operating across 29 European cities, Bob W completed a €40 million Series B funding round in February that was led by Finnish venture capital firm Evli Growth Partnership.
Launched in 2011, Osborne+Co has delivered over £6 billion projects as a developer and landlord. Recent projects include Santander’s UK Headquarters in Milton Keynes and the JPMorgan Chase European Technology Hub in Glasgow.
Philip Grace, chief development officer at Bob W, will be discussing ‘Consolidation and investment prospects in the STR sector’ at Urban Living Festival in London on 18-19 September. Book your tickets now at this link.
