Rents soar as luxury homes are snapped up

PUBLISHED : Wednesday, 07 September, 2005, 12:00am
UPDATED : Wednesday, 07 September, 2005, 12:00am

Corporate expansion set to fuel rising prices as stock of vacant units dwindles

For most, $260,000 would be a healthy down payment on a flat, but for high-flyers in the Peak's rarefied atmosphere it only covers the rent for a month in a new development where management fees will set tenants back a further $16,000.

As the luxury residential lease market grows on limited supply and strengthening demand, a 4,407 sq ft house at 2 Barker Road has been leased, ahead of an official launch, to an unidentified tenant for $60 per square foot, says agent Jones Lang LaSalle.

Joseph Tsang, the firm's international director and head of residential, said the house was one of 11 owned by China Resources (Holdings), an overseas investment arm of the State Council.

China Resources also owns five top-end houses at 40 Peak Road that have been let to senior executives of multinational companies for between $280,000 and $360,000 a month.

The landlord will officially launch the remaining 10 houses on Barker Road for lease at the end of the month.

All houses are more than 4,000 sq ft and have four or five bedrooms, private gardens, balconies and roof terraces.

Tenants are required to pay management fees of $15,000 to $16,000 a month.

The average rent of luxury residential properties jumped 13.2 per cent in the first half of the year, according to Jones Lang LaSalle.

A further rise of 10 per cent is expected in the second half.

'We expect the rents to go up further as corporations continue to expand office space and head-counts and the leasing stock continues to drop,' Mr Tsang said.

Rents for properties on the Peak rose an above-average 18 per cent in the first half of the year, the property consultant said.

In Island South, rents grew 13 per cent and in Mid-Levels they were up 14 per cent.

At the 20 most popular luxury residential estates, rents surged 44 per cent on average to $24.80 per square foot in the first half, compared with a low in June 2003 during the Sars crisis of $17.20, according to Midland Realty research.

Knight Frank said the luxury residential leasing market was becoming increasingly competitive, particularly with the addition of new serviced apartment properties such as Four Seasons Place in Central.

The property consultants said the Four Seasons apartments had been well-received, with the landlord - a venture owned by Sun Hung Kai Properties and Henderson Land Development - leasing out the first batch of apartments at an average of $53 per square foot per month.