Shanghai's booming serviced apartments sector is attracting small mainland investors looking for steady rental income on investments of less than 1 million yuan.
At a recently concluded real-estate exhibition at the Shanghai Exhibition Centre, crowds gathered around booths of developers promoting this latest property investment trend.
One project, named 2335 Hotel Apartments, in Pudong, had a perky marketing slogan playing on its name. Its developers said even a 23-year-old could afford to buy one of the 35-square metre fully-furnished, ready-to-rent units, the cheapest of which costs just 200,000 yuan.
There are at least half a dozen similar projects on the market, offering the same attractions: low entry price, hassle-free leasing on behalf of the owners and an annual net return of 8 per cent to 10 per cent.
The serviced apartment sector used to be the preserve of deep-pocketed corporate investors, such as developers, hotel chains and property funds.
But in recent years, builders have started to target blocks specifically at individual buyers.
The blocks are sold by units, but run jointly by a management firm which is committed to deliver a fixed monthly sum to the owner. In some instances, these blocks were converted from half-finished office buildings whose original developers went bankrupt during the last crash in the late 1990s.