These articles below can also be found in the June 2009 issue of Serviced Apartment Guide:
Hong Kong’s serviced-apartment sector has been booming for over a decade and it’s still going strong
Serviced apartments in Hong Kong have been going from strength to strength in recent years. Lease lexibility, hassle-free living, convenient locations and cheaper-than-hotel rates have all added to the industry’s growing appeal. The draw is of course that you get facilities on a par with those provided by a good hotel, plus home-from-home comforts.
It’s a good question whether you should call serviced-apartment dwellers tenants, like in apartments, or guests, like in hotels. But whatever name you pick, the people who use serviced apartments are willing to pay a premium to beneit from the lexibility of a serviced apartment, which doesn’t require a long-term lease. On average, serviced apartments cost 20 percent more to rent than standard residential units in the same neighbourhood. And those seeking to avoid the sterility of hotels are lining up to pay that kind of rate.
Overseas and local corporate employees make up about 80 percent of the serviced-apartment industry’s clientele. Another 10 percent consists of business travellers, and the rest are a combination of Hong Kong residents returning from overseas, wealthy mainlanders and long-stay tourists. In recent times, expat employees uncertain of their job security amid the shaky economic climate have been moving in, to boot.
“The strong demand for serviced apartments in Hong Kong has increased the overall supply, either in the form of redeveloped residential blocks turned into serviced apartments, as in the case of Kush Living, or newer purpose- built properties, such as the Gateway Apartments in Tsim Sha Tsui (TST), or the Four Seasons Apartments in Central,” says Benedict Ma, associate director at CB Richard Ellis (CBRE) Research.
According to Ma, early market entrants were generally associated with ive-star hotels or major commercial complexes such as Paciic Place Apartments in Admiralty, Convention Plaza Apartments in Wanchai and New World Apartments in TST. They supplied the servicing demand from overseas top-level executives.
In the past ive years, the market has grown due to multinational corporations tightening the housing budgets of executives, and shortening their stay overseas. Competition is heating up with more serviced-apartment operators entering the market. Consequently, the boutique environment has emerged, comprising chic little serviced-apartment blocks run by independant companies. Operators in this category often vie for tenants by differentiating themselves through modern design and offering the latest in home entertainment systems and amenities. high-level executives coming here. These include serviced-apartment operators such as Shama, Home2Home and Como Como,” says Ma.
“Boutique serviced apartments are usually located close to prime business districts so that executives can easily get from work to home, as well as having close access to leisure, dining and entertainment facilities. Design tends to be trendy, therefore attracting the younger mid- to
At boutique-styled serviced apartments in and around Central, monthly prices range from HK$35 per square foot to HK$50 per square foot, whereas higher-end serviced apartments can rent for as much as HK$80 per square foot. In comparison, serviced apartments in TST have monthly rates of about HK$40 per square foot to HK$50 per square foot.
The industry irst began to expand out of prime commercial districts on Hong Kong Island back in early 2008, notably with the opening of Sun Hung Kai Properties’ International Commerce Centre, which saw demand spread across the harbour to TST and West Kowloon. And it is worth noting that the majority of new projects are being built outside the CBD. As with ofice space, there is almost no new supply of serviced apartments coming up in the near future in Central or neighbouring Admiralty.
Serviced apartments will continue to crop up where there is increasing demand in places like TST, Wanchai and Causeway Bay. For the same reasons, Ma believes that the need for new serviced-apartment properties will grow in up-and-coming redeveloping areas such as Kowloon Bay and Kwun Tong.
Runaway success
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