Bob W, the Finnish tech-powered hospitality company, has joined hands with Osborne+Co Investment Management (OCIM) and launched a £120 million ($155.55 million) equity raise to purchase and repurpose hotel and office buildings into short-term serviced apartments.
OCIM is the in-house investment and management vertical of developer and investor Osborne+Co.
The value-add fund will mirror OCIM’s office portfolio in Europe and targets key European markets, such as Ireland, Spain, Portugal, Poland and the U.K.
The two companies have formed a joint venture that will seek to convert 20 to 25 buildings into 1,500 to 2,000 apartments and is aiming to achieve a gross development value of over £400 million ($518.5 million) for its initial pipeline.
The first set of apartments is anticipated to open in 18 months. Bob W will operate all the assets developed under the partnership.
“This strategic partnership marks a major milestone for Bob W, enabling us to merge our tech-driven hospitality solutions with Osborne+Co’s expertise in real estate development,” said Niko Karstikko, CEO and co-founder of Bob W. “Together, we aim to transform under-utilized spaces into vibrant, high-quality serviced apartments that meet the evolving needs of modern travelers. This partnership will enable us to deliver not only significant value for stakeholders, but also an authentic luxury 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 travelers.”
The partners will identify obsolete or underperforming assets and maximize asset performance and improve the property’s overall value across the new portfolio. The strategy is also environmentally friendly, as existing buildings will be transformed into new assets thereby reducing the portfolio’s overall carbon footprint. The refurbished properties will be further optimized for operational efficiency, including better insulation and other energy-saving features.
The partnership with OCIM aligns with Bob W’s pledge to sustainability. The hospitality company is among the first global climate-neutral hospitality provider and sources second-hand furniture, uses 100% renewable energy and double offsets its emissions, Bob W said in a statement.
In November 2023, Bob W launched the ‘Show Us Your Numbers’ campaign and made public its greenhouse gas emissions per guest night to create a benchmark in environmental reporting. As part of the campaign, the company challenged the hospitality industry to reveal its actual carbon footprint.
Bob W and OCIM are actively exploring an investment partner to create a pan-European platform.
Serviced apartments are one of the fastest-growing asset classes in Europe, fueled by rising demand for flexible, high-quality accommodation options, Bob W said. Citing data from a Bonard study conducted in 2023, the company said the serviced accommodation sector is worth £1.7 billion ($2.2 billion) to the U.K. economy alone.
“We have seen recent exits in both single assets and operational platforms that demonstrates the liquidity of the serviced apartment asset class,” said Rishi Khurana, OCIM’s co-founder.
The growth of the serviced apartment sector is driven by several factors, including the increasing volume of remote work, post-pandemic resurgence of business travel, rising demand for spacious and self-contained lodging options and greater vacancy rates in European office markets. As a result, Bob W said, serviced apartments offer lucrative investment opportunities with robust potential for long-term ROI.
Bob W currently operates in 20 cities across Europe. The company secured €40 million in a Series B funding earlier this year, which was led by Finnish venture capital company Evli Growth Partnership, along with growth capital investors and European entrepreneurs. The investment was the biggest so far for the group.
