Medium-term “executive rentals” — fully furnished, professionally managed apartments leased for 30 to 120 nights — are quickly becoming one of the most profitable and resilient segments of the urban property market. In 2024, European serviced apartments recorded a 3.8% rise in occupancy and a 4.4% increase in revenue per available room (RevPAR), driven largely by corporate demand and longer booking windows. This stability sets them apart from hotels and short-stay tourist lettings.
Policy Shifts Reshaping the Market
Urban housing rules across Europe are tightening, creating a favourable environment for medium-term rentals:
- France: From 2025, mayors can cut the cap on tourist letting of a main residence from 120 to 90 nights per year, with fines of up to €15,000 for violations.
- London: Short-term tourist lets are limited to 90 nights annually without planning permission, but longer consecutive stays avoid this cap.
- Barcelona: Licensed tourist apartments will be phased out by November 2028. Mayor Jaume Collboni stated: “We want to return these flats to the residential stock and facilitate access to housing for the residents of Barcelona.”
Such measures protect residential availability while creating a regulatory advantage for landlords offering month-plus stays, ensuring compliance and long-term income security.
Corporate Demand Driving Growth
As business travel stabilises, companies are booking longer accommodation blocks for staff relocations and project assignments. Analysts expect the corporate segment to be the main growth driver in 2025. Chris Liddiard, Real Estate Finance Relationship Director at HSBC UK, notes: “More money… has been chasing relatively few assets, pushing down margins and making terms and competition more intense, particularly for the top operators.”
In London’s luxury rental market, Knight Frank’s Tom Smith adds: “People are now opting to rent as a choice… more prize freedom and flexibility.”
What Tenants Are Paying in 2025
Based on corporate housing ADRs converted to euros (ECB, August 2025), average monthly rates for a one-bedroom unit are:
- London: ~€5,260 | Two-bed: ~€7,440
- Dublin: ~€3,570 | Two-bed: ~€4,570
- Paris: ~€4,030 | Two-bed: ~€5,570
- Amsterdam: ~€3,950
- Berlin: ~€4,750
- Zurich: ~€4,520
- Dubai: ~€5,000 | Two-bed: ~€7,440
These rates far exceed standard long-term leases, but with corporate contracts and lower vacancy risk, yields are significantly stronger.
Why This Model Works
- Premium Pricing: ADRs in the €3,500–€7,500 range for prime European cities.
- Steady Occupancy: Longer stays smooth income across the year, avoiding seasonal dips.
- Regulatory Advantage: Month-plus contracts bypass restrictive short-let caps.
2025 Investor Playbook
- Target Locations: Financial hubs, tech districts, embassy areas, and near major hospitals or universities.
- Property Specs: One- or two-bed units with high-speed internet, in-unit laundry, quality workspaces, and reception or parcel services.
- Pricing Strategy: Benchmark to corporate housing rates, not tourist listings.
- Occupancy Management: Lease in 45–120 night blocks with flexible extension terms.
- Compliance First: Register properties where required, follow city rules, and maintain a strong legal track record with corporate clients.
Bottom Line
With political momentum favouring residential use over tourist accommodation and corporate mobility on the rise, executive rentals offer a blend of high yields, legal security, and stable demand. In 2025, the most successful urban property investors will be those who master this medium-term, business-backed leasing model — where profitability meets predictability.
