A new word should be added to the long list of commercial accommodation concepts to which the health crisis has given a boost. Flex Living or medium-term furnished rentals sit well alongside others and generate a whole new ecosystem.
Furnished rental of less than 8 months - call it Flex Living to keep up with the times - has existed for a long time, but it was a business for traditional real estate players without necessarily being "marketed" any more than that.
The change in behavior mainly among business travelers, resulting from the health crisis, has opened up new areas of activity for nomadic customers who move their place of life according to contracts, missions or desires.
By adding long-term interns, employees in a trial period, executives in training, it is a rapidly evolving market which interests established groups to offer them a suitable solution or new players who have set up their own distribution platforms.
The United Kingdom, France and Spain are on top of the podium of countries where Flex Living is developing the most, quickly followed by Germany and the Benelux. Local players have developed there, each with the desire to export their know-how and their network at the European level.
British pioneers eye the rest of Europe
In this new approach to the market, in the United Kingdom, the company Flex Living https://www.theflexliving.com is a pioneer, established since 2019. The two founders Michael Buggy and Raouf Yousfi say: “It all started with a cafe on a cobbled street overlooking London's Tower Bridge... We were discussing all our colleagues who regularly travel for long periods and have to find unsatisfactory solutions to feel at home, even for a few months.”
They see a business to be created by combining the availability of furnished apartments for periods ranging from one month to less than a year and the needs of a community of travelers looking for real temporary accommodation. Thus Flex Living, today leader in the United Kingdom and already present in France, Algiers and Dubai.
Spain is an El Dorado for investors who unlock hundreds of millions
Spain quickly saw a development of the Flex Living formula, driven by real estate investors who joined forces with site managers and distribution platforms.
John Lang Lasalle has identified investments totaling nearly 600 million euros in less than 5 years. And the movement is accelerating. Already at the head of the largest portfolio of sites, the Greystar group continues to make acquisitions and has planned €500 million new investments over 2024 in major Spanish metropolises. He created Be Casa, his own service company, which manages operations.
Its great local rival, Stoneshield, founded by Felipe Morenés and Juan Pepa, also announces €500 million euros of investment in Madrid alone to build 3,500 homes available in flex living.
Other investors are also supporting the development such as Bain Capital or Kora Living, who have thousands of beds in the pipeline, in addition to already operational portfolios.
Wunderflats, the German start-up displays great ambitions
In Germany, the market has been seized by Wunderflats, created in 2015 by two entrepreneurs who are also business angels, Jan Hase, CEO, and Arkadi Jampolski, managing director. With 50,000 addresses available in less than 8 years, they have made their way to the top of the distribution platforms in a market already occupied since 2009 by “veterans” like HousingAnywhere or Spotahome, and facing new rivals in the field, appetite whetted since Covid, like Kummuni or Breeze Venture.
Wunderflats has now been established in France since 2022 with a subsidiary which already has 7,000 apartments in its portfolio, mainly in the Paris region, and which has the ambition to cover all major regional metropolises before the end of 2024 with an offer at least doubled.
This subsidiary faces the presence of other companies in the sector such as FlexLiving or WeekAway. Everyone cultivates a model that must attract owners so that they entrust them with their property. Most of the remuneration of the platforms comes either from a subscription system paid by users who have access to a more or less vast choice; or a commission taken largely from the tenant and a minority from the owner (6 to 7% of the total of the rent over the period for an individual not subject to VAT.
The range of services is also evolving, from a simple connection between owner and temporary tenant to a real concierge service, including cleaning and maintenance work which maintains the quality of the rented property.
An objective alliance with the more traditional hotel industry
In the debate which animates local elected officials and professional unions, the proponents of Flex Living say they are calm and want to make their voice heard as a complementary formula which does not bother hoteliers or proponents of short-term seasonal rentals.
The furnished apartments available are rented for a minimum of one month and a maximum of eight months, to comply with French legislation. For Gabriel Brueser, the French boss of Wunderflats, it is even more a question of introducing himself to traditional hotel groups, who may find it interesting to associate with a platform which offers medium-term rentals, complementary to their offer for customers who do not plan to stay at the hotel for months.
Monthly rental rates are well above long-term rentals but more attractive than a multiple of the Airbnb daily rate: depending on the location, more than 1,000 euros for a small studio to more than 2,500 euros for a two-room apartment and more than 4,000 euros for a three-room apartment. But administrative management is simplified, and the apartment is ready to be lived in a beautiful area.
The health crisis has accelerated changes in practices and created new needs for nomadic workers. The world of hospitality knows how to encourage new vocations of entrepreneurs to adapt to these changes by creating new concepts or updating already old formulas. Flex Living is one of them and has continued to develop alongside coliving, coworking, hybridization and third places.
