Flex living is gaining traction in the Spanish market, although its development is still in its early stages. It is estimated that medium-term rentals or flex living will double in Spain within three years, according to the annual report “State and Trends of Flex Living in Spain” by Atlas Real Estate. Juan Carlos Soldado, co-founder of Muppy, a short and medium-term accommodation operator, explains in this interview why concepts like flex living are gaining importance and attracting investor attention in the real estate segment, in a world where mobility and flexibility are more valued than ever.
What is Muppy? Let’s talk about the origins of the project and its founders.
The company emerged after the pandemic, in 2021. At that time, we identified an opportunity in the Spanish rental market due to factors such as the lack of flexibility in rentals, which do not allow for adaptation to new ways of living in cities; high commissions and difficult access to housing; a very deteriorated and unprofessional rental stock; dissatisfied tenants with roommates, etc. The reality is that leisure time and experiences are increasingly valued, so offering an “all-inclusive” that saves users time and worries was a great opportunity and also a challenge.
Muppy is the first flex living operator present in the five main cities of Spain: Madrid, Barcelona, Valencia, Alicante, and Malaga. We have three types of flex living. On one hand, co-living: private rooms in shared apartments (10-25 square meters) with a high component of community and shared living. On the other hand, smart-living: private studios (kitchen and bathroom), which offer independence and a balance between comfort, flexibility, and services. Finally, corporate-living: high-end apartments of 50-100 square meters. A full luxury experience, flexibility, and services.
We offer temporary accommodation (from 1 to 11 months) with included services and city experiences based on tastes and interests (through our own technology developed in-house) to professional profiles between 22 and 45 years old. Hence the differentiation of assets and types we have in our portfolio: granular homes, complete floors, and entire buildings.
At Muppy, we facilitate integration and cultural exchange in cities through our active community with more than 4,600 young professionals.
What does the company bring to the real estate market?
Above all, flexibility and adaptation for tenants and peace of mind for property owners.
Tenants can rent without much paperwork or bureaucratic procedures for periods of less than a year. In a traditional rental, this is not the case; many procedures are required, which, for someone foreign, as many of our clients are, is very difficult to do. A traditional rental also does not lease for less than a year, and for someone who will only be in a city for less than twelve months, this is a significant difficulty. Muppy solves these problems with its flexible model.
“We manage entire buildings and granular homes, as well as converted spaces.”
Property owners are offered peace of mind. They do not have to worry about any kind of management during the entire contract period, usually 5 to 10 years. Additionally, Muppy takes care of the maintenance of the apartment with recurring professional cleanings and its own maintenance team. Thanks to the adaptations made to the spaces with our own design team, the asset also appreciates in value.
Unlike most companies that manage entire buildings, Muppy combines comprehensive asset management with standalone homes in city centers. How is it different from a shared apartment? Has this allowed you to increase your portfolio?
At Muppy, we manage entire buildings and granular homes, as well as converted spaces. In the buildings, users can enjoy more common areas such as a gym, coworking space, cinema room, rooftop… In granular homes, common areas are offered as it is one of our necessary requirements to foster in-house socialization, coexistence, and cultural exchange, although it is more limited by space.
Having the complete management of a building is more optimal for us because it offers a plus to the tenant due to the services and amenities provided. To grow the portfolio, it is indeed easier to capture standalone homes, but the focus is to continue growing with buildings and complete portfolios.
What role does technology play in Muppy’s operations? What are the latest innovations that have been implemented?
We have always invested heavily in technology. From the start, we wanted to develop our own technology and improvements that allow us to be more efficient in operations, offer a better user experience, and plan and make decisions based on data and experience. We have our own platform that we have developed (Caronte), where you can view all the dynamic management and information, both of the asset and the users.
Besides, we also use technology within our assets with automated access. We do not use physical keys but access via software and user geolocation. This code cannot be shared. This allows us to have 360-degree control of the property.
What is the profile/profiles of the tenant(s) who most demand flexible accommodations?
It is a professional profile. They are usually workers who come to the city for a specific project for a few months and prefer this type of service over a hotel for convenience. There are also many digital nomads who decide to come to Spain to get to know the country better for a few months. We have agreements with different companies that use our services for their employees.
“It is a booming sector due to high demand, scarce supply, and the good returns compared to traditional investments that it offers to investors.”
We always adapt to our client. Some, for example, want more independence and we offer them our studios that have a private bathroom and kitchen. As I said, Muppy offers flexibility in everything.
Recently, Muppy raised 2.3 million in a financing round to boost flexible renting. Tell us the details of this operation and what projects it will allow you to tackle.
Indeed, this round allows us to continue consolidating ourselves as a key player in the “prime areas” of the cities where we are present, grow in structure, and analyze the opening of international cities that demand our presence.
Regarding the future, what are Muppy’s expansion and growth objectives?
We want to reach 1,000 units in the different cities we operate in by 2024, and we are on the right track! Looking ahead to next year, we are already starting our international expansion. The most important thing for us is not just to continue growing but to keep offering the best possible service to our clients in unique locations and assets, providing value to different generations and, therefore, to society.
Today we have more than 110 units in a granular format and more than 10 complete buildings, establishing long-term relationships with the main local patrimonial companies and large institutional property owners in this country.
The flex living sector is experiencing notable growth in Spain, with projections to double its supply in the next three years, according to data from Atlas Real Estate Analytics. How would you describe the current state of flex living in our country and where will it evolve?
Yes, it is clear that this sector is booming, especially in the last two years due to high demand, scarce supply, and the good returns compared to traditional investments that it offers to investors.
It will continue to grow exponentially as there is still a lot of good work to be done in Spain. It is one of the European countries with the highest demand and lowest supply, but we understand that it will consolidate if the main market players do things well over the coming years.
Today there are numerous “companies” dedicated to temporary rentals, and we understand that in the future, there will be a trend towards grouping, absorption, or disappearance of many of them.
Muppy wants to continue growing with the customer at the center and adapting and updating the product to new user demands with ad hoc criteria.
