Growth at Home in Germany Is Cheap, Says Limehome

06.12.2023 - 04:33 / skift.com / Srividya Kalyanaraman

It’s not very often that I receive pitches that read a short-term rental operator’s portfolio grew 40% in the first half of the year. And so when I learned that limehome added over 1,000 properties to its portfolio this year alone, my eyebrow raised itself. 

Here are some numbers: The Munich-based company that operates in seven countries in Europe, with Germany being its main market, has 4,500 units in its portfolio — 1,000 of which were added this year alone. And the company is on track to end the year with 5,500 units. 

A lot of these are new units and new builds — at a time when new construction in Europe is both taking longer and is more expensive, albeit more energy efficient (credit where due) compared to the U.S. — by some accounts, up to 50% more expensive. So what are these new builds limehome is getting done at flash-speed. 

CEO Josef Vollmayr explained that a lot of them are office conversions. “We are getting squeezed into mixed-use buildings. They are not building an entire building for us, but rather a floor that can be used for accommodations.” 

Vollmayr attributed a lot of this success to the company’s strategic relationship with real estate — institutional investors, asset managers, and developers. 

“We are very strong in conversions,” he said referring to office space conversions. “old empty office buildings take 12-15 months to convert, the licenses are already there since it’s a commercial property — all we need is a bathroom.”

A smart strategy, sure, but not a new one — a&o hostel group does something similar across Europe. What I found intriguing and honestly, limehome’s secret sauce, is going small instead of big. The company has new properties with up to 74 units being built in Braunschweig, Kiel and Gelsenkirchen — cities with a population of around 250,000.

“In smaller cities – there is no competition in terms of supply,” Vollmayr said.

He added that leisure and business are not the only reasons for travel. “Some people are attending funerals, maybe,” he said. What also works in limehome’s favor is timing. A lot of rapidly depopulating German municipalities have the mandate to revive industry and the economy in small towns. 

“In all of these places there is enough demand, plus retail is dying out in high streets and city centers in these towns, so we have the support of the municipalities in bringing people back to these cities.” In the 50,000 to 100,000 inhabitants category, limehome signed contracts for new properties in Kaiserslautern, Hof and Göppingen. 

In most big cities around Western Europe limehome has a presence with 150-200 units. For a four-year-old startup with 81 million euros ($90 million) in funding, investor pressure can be real at this time. Vollmayr wants