The number of vacant, expensive apartments is rising. How a start-up makes a lucrative business out of it.
Once luxury apartments were something of the best that could happen to an investor. They attracted solvent tenants and guaranteed a well-balanced income. But business isn’t as good as it has been. Investors have built many new, chic apartments in recent years – but demand could not keep up.
Second Life for Luxury Apartments
The consequence: Landlords often sit on their expensive apartments. Or they have to cut prices – in some cases, there is the talk of rent reductions of up to 30 per cent in Zurich. This reduces the return on investment but is good for Madeleine Fallegger. Because the young entrepreneur has created a new business model with the vacant luxury apartments.
Le Bijou in “Der Bund”
Together with her colleagues Alexander Hübner and Renato Steiner, she rents expensive housing, transforms it into luxury apartments for tourists and business people and rents it out. Cost: depending on location and equipment CHF 300 to CHF 3500 – per night. The apartments are offered on online platforms such as Airbnb, Booking or Expedia. “We see ourselves as the middle ground between Airbnb and luxury hotel,” says Fallegger. It is prepared for the question of whether this will deprive the market of living space. “Some of the properties we rent had been vacant for months.”
According to Fallegger, the start-up Le Bijou now manages around 30 furnished apartments in Zurich, Zug, Lucerne, Basel and Berne. Geneva is due to join soon. The offer also includes a “digital butler”: an app that can be used to book additional services such as food, taxi rides, clothes washing or massages. The providers are not employees, but self-employed or established companies. The food is delivered by restaurants in the neighbourhood of the apartments.
The more luxury apartments are vacant, the easier it is for Le Bijou to acquire new properties. Fallegger closely monitors what is happening on the market:
“As soon as I find an apartment that would be suitable for us, I’ll contact the landlord. Often he doesn’t want to know anything about our model, because he thinks it brings a lot of effort and restlessness in the house.” However, many apartments are still being advertised a few months later. “Then I’ll contact again and ask nicely whether the interest is now greater.”
If an apartment has been on the market for a long time, “it naturally strengthens our negotiating position,” says Fallegger. She notices that the range of suitable properties is growing all the time. “Two years ago there were very few apartments in Geneva that were suitable for us. Today there are already around 100.” She observes a similar development in Zurich.
“Der Bund” writes about Le Bijou
Read HERE the complete article „Second Life for Luxury Apartments“ in “Der Bund“.
Source: “Der Bund” – go to the website
Photos of selected Le Bijou Apartments:
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