Institutional capital, serviced apartments and extended stay travel in Berlin and Bielefeld
When institutional capital meets the serviced apartment sector
M&G Real Estate’s European Property Fund, which manages more than five billion euros of capital, has made its first serviced apartment investment in Germany. In a forward purchase agreement signed in late 2023 and completed in early 2024, the fund acquired 404 fully serviced apartments in Berlin and Bielefeld through deals worth 73.5 million euros, signalling that serviced apartment investment at institutional scale is no longer a niche thesis but a core real estate strategy in Europe. For travelers choosing accommodation for premium urban stays, this move quietly reshapes what a serviced apartment or extended stay apartment will feel like on the ground.
The properties, developed by Livory and operated by the company smartments under 20 year leases, sit firmly in the apartment sector rather than in traditional hotels, yet they borrow the best of both hospitality models. These serviced apartments are designed as fully furnished units for short stays, extended stays and long term stays, with hotel grade services layered onto real apartment layouts that work for business travel, digital nomad life and premium family trips. As one industry definition puts it without ambiguity; “What are serviced apartments? Fully furnished apartments available for short or long-term stays.”
Key facts: Berlin and Bielefeld serviced apartment investment
- Investor: M&G Real Estate’s European Property Fund (c. €5 billion AUM)
- Assets: 404 fully serviced apartments in Berlin and Bielefeld, developed by Livory and operated by smartments
- Transaction size: €73.5 million via forward purchase (agreement signed late 2023, completion early 2024)
- Lease structure: 20 year fixed leases with smartments as operating partner
- Performance assumptions: Berlin asset modelled on an occupancy rate in the mid 80 percent range and a stabilised net initial yield of around four percent, as outlined in the M&G Real Estate transaction note
- Sustainability profile: EPC A rating in Berlin and a BREEAM In Use Very Good target, according to smartments’ sustainability disclosures
- Documentation: EPC and BREEAM certificates, along with detailed performance assumptions, are available on request from both the operator and the fund manager
For a fund of this scale to enter the serviced apartments market, the operational performance of the underlying property has to meet institutional standards that international investors expect from prime European real estate. That means rigorous maintenance cycles, energy efficient systems and ESG compliant construction that go far beyond many older apartments in Europe. Travelers may never read the lease contracts or the M&G Real Estate transaction note, but they will feel the difference in air quality, sound insulation and the way the building handles the real demand accommodation patterns of modern hospitality.
What institutional quality means for your stay serviced in Berlin and Bielefeld
Institutional estate investment changes the way an apartment is conceived, furnished and operated over time, because the landlord is not a small private owner but a regulated fund with reputational risk. In Berlin, the EPC A rated scheme operated by smartments under a 20 year lease is built for durability; fixtures, kitchens and family friendly layouts are specified to last through multiple extended stays and long term stays without the quick wear and tear that plagues some short term rental apartments. In Bielefeld, where the development has been fully operational since February and already serving business travel and leisure stays, the focus on operational performance is visible in consistent housekeeping standards, digital access systems and the quiet efficiency of on site services.
For guests, this level of professionally managed serviced accommodation translates into a more predictable experience than many fragmented urban rentals, while still feeling more residential than a conventional hotel. You check into a real apartment with a proper kitchen, generous storage and enough space for children, yet you benefit from professional hospitality staffing, clear safety procedures and a digital guest journey that respects your time. This is the same philosophy we explore in our analysis of the concierge free luxury stay model, where the emphasis shifts from lobby theatre to the quiet reliability of the space you actually live in.
“Our guests want the freedom of an apartment with the reliability of a hotel,” a smartments operations manager in Berlin explained during a recent site visit. “Institutional backing allows us to invest in better soundproofing, smarter energy systems and long lasting interiors, so a family staying for three weeks experiences the same quality as a corporate guest on a three night trip.” Institutional investors such as M&G Real Estate do not enter a new accommodation sector lightly, especially when their European Property Fund already spans multiple property types across Europe. Their move into serviced apartments signals that the apartment sector for hospitality has matured into a recognised asset class, with case studies that show resilient demand from international guests, digital nomad workers and corporate bookers seeking extended stay options. For travelers, the key takeaway is simple; when a five billion euro fund commits to stay serviced products, apartments will increasingly be designed from day one to meet both guest expectations and the stringent risk controls of large scale investors.
How this shift reshapes urban luxury escapes for premium families
For premium families planning urban luxury escapes in Europe, the rise of institutional grade serviced apartments changes the value equation compared with traditional hotels. Instead of booking two adjoining rooms in a hotel brand that may prioritise lobby design over usable space, you can choose a serviced apartment that offers separate bedrooms, a living area and a full kitchen while still delivering consistent hospitality standards. This is particularly relevant in cities like Berlin, where apartments Europe wide are competing for both short city breaks and extended stays from families who want to unpack once and live like locals.
On a recent spring trip, for example, a family of four staying in one of the Berlin units described the experience as “like borrowing a well designed city home with hotel backup.” The parents worked remotely at a proper dining table while the children used a separate bedroom, and the ability to cook breakfast in a fully equipped kitchen meant they could treat the city as a temporary neighbourhood rather than a sequence of tourist stops. Institutional ownership also encourages operators such as smartments to invest in digital infrastructure, from keyless entry to responsive guest apps that streamline everything from housekeeping requests to local recommendations. For remote workers and digital nomad parents, the presence of well designed coworking spaces within or near these properties can turn a simple stay into a functional base for several weeks, aligning with the patterns we map in our guide to off peak apartment travel calendars in Europe. Families who value both privacy and connectivity will notice that serviced accommodation backed by institutional capital tends to offer better soundproofing, more reliable Wi Fi and layouts that separate work and sleep zones.
This institutionalisation of the serviced apartment market also broadens the geography of high quality stays beyond the obvious capitals, as shown by the inclusion of Bielefeld alongside Berlin in M&G’s portfolio. As more European real estate funds study case studies from Germany and other markets, the apartment sector for hospitality is likely to expand into secondary cities and alpine or lakeside destinations, complementing the curated stays we feature in our coverage of luxury apartment stays in quieter regions. For travelers, serviced apartment investment institutional quality ultimately means more choice, more consistency and a clearer line between casual listings and professionally run properties that are built to last through multiple real estate cycles.