Accommodation oversupply and housing shortage: the integration of 126 additional hotel apartments within the existing landscape
In the heart of Karlsruhe, a popular location for businesses and tourists alike, Limehome has chosen to establish its serviced apartments at Kaiserstraße 178-182. The decision comes as a response to the high demand for flexible living and working spaces in city centres, particularly in the segment catering to short- to medium-term stays.
Limehome, a company specialising in serviced apartments, offers a unique blend of hotel-like services and the convenience of an apartment. This premium product, which appeals to business travellers, tourists, and remote workers, has proven to be in high demand, with an average occupancy rate of over 80% shortly after opening, and a nationwide rate of 90%.
The decision to convert office spaces into serviced apartments, rather than traditional residential apartments or hotels, may be attributed to several factors. Serviced apartments can generate higher rental yields due to premium pricing for flexibility and amenities. Moreover, they may better align with market demand for flexible living and working spaces, especially in city centres where demand for transient accommodation is strong.
Regulatory or financial incentives might also favour serviced apartment conversions over traditional housing developments in certain urban locations. Despite a lack of affordable housing, the developer might see serviced apartments as a more viable commercial opportunity or as part of a diversified urban real estate strategy.
However, it is essential to note that these factors remain inferences drawn from general market trends and Limehome's business model. A direct statement or interview from Limehome or local government sources would be necessary for precise motives.
The city of Karlsruhe approved the use of the upper floors of the building last year, and a rental agreement between the owner, SV Sparkassenversicherung, and Limehome was established. The approval was granted on the condition that a legally approved change of use is carried out.
Limehome's expansion decisions are based on data, with an analysis of usage concepts and demand for various options conducted to ensure the viability of their projects. The company argues that their apartments are significantly cheaper and attractive for travellers, positioning themselves as an alternative to traditional hotels.
The apartments at Limehome Kaiserstraße will offer a larger selection of suites for up to six people, providing ample space for families or groups. The project is expected to be completed by 2028, contributing to the ongoing urban development in Karlsruhe's future.
Despite the approval for the conversion of office space to serviced apartments, the city of Karlsruhe usually requires a permit for such changes due to changing building requirements. This requirement ensures that the conversion is carried out in a manner that aligns with the city's development plans and maintains its architectural integrity.
In 2024, a hotel report showed no further need for hotels in Karlsruhe, indicating a growing trend towards alternative accommodations like serviced apartments. As Limehome continues to expand, it will be interesting to see how this trend evolves in the city.
- The decision for Limehome to convert office spaces into serviced apartments in Karlsruhe might be influenced by the potential for higher rental yields from premium pricing for flexibility and amenities, as well as the alignment with market demand for flexible living and working spaces.
- With the growing trend towards alternative accommodations like serviced apartments, technology can play a crucial role in enhancing the guest experience at Limehome's serviced apartments in Karlsruhe, especially in sports-related services such as fitness equipment, smart lock systems, and digital concierge services.
