Young professionals drive the growth of boutique-style flats

Expatriates and international businessmen always find it a headache to establish a home away from home even for a short stay in a foreign place where neither hotel accommodation nor renting a private flat is a viable option for them.

Serviced apartments combine the privacy of home living with the convenience and flexibility of luxury hotel accommodation. Demand for such accommodation has grown as a result of the trend among multinationals to redeploy and relocate their staff.

As the market expands, serviced apartment providers are homing in on young professionals - with quite a few mainlanders among them - who are looking for accommodation that is trendy, comfortable and convenient.

Investors and developers have carved out a niche with boutique serviced apartments.

This is a relatively new segment of the market in which the apartments are generally small but are decorated and furnished to a very high standard to provide a trendy, comfortable and homely atmosphere, according to Simon Wong Sau-chuen, research director at CB Richard Ellis.

Serviced apartments come with a wide range of amenities and services, including kitchen and laundry facilities, housekeeping and even a concierge, and membership or discount schemes linked to hotels, shops and restaurants.

Rents for such apartments averaged HK$39.60 per sqft in the fourth quarter last year.

'The sustained rental surge recorded in the fourth quarter of 2006 was the best indicator' of demand for boutique serviced apartments, Mr Wong said.

'The majority of serviced apartment residents in Hong Kong are now looking for lower cost or voguish serviced apartments, with monthly rent ranging from HK$27,000 to HK$40,000.

'Boutique and standard serviced apartments, which fit such users' needs ideally, are therefore in demand.'

One of the leading players in this segment of the market is Shama, a serviced apartment and property group controlled by Morgan Stanley Real Estate Fund, which operates six serviced apartment properties in prime areas in Causeway Bay, Wan Chai and Central.

Deanne Siqueira, head of group marketing and business development at Shama, said: 'Our occupancy rate across the properties averages 90 to 95 per cent.

'The market is growing as there is a very high demand for luxury serviced accommodation and we have discovered with our tenants that they place emphasis on location and convenience.'

The latest development at home2home Lifestyles Management is Abeo, a serviced apartment property in Aberdeen that offers resort-style living and a relaxing atmosphere. Since its 52 luxury units were launched last November, Abeo has chalked up an occupancy rate of about 50 per cent.

Competition in this niche market may be tough but Heddy Li Suk-fan, director of operations at home2home, said: 'We do not compete with any of the other serviced apartment operators. We have our own niche; the unique design, facilities and amenities and our personalised services speak for us.'

Inevitably adding to the demand is the booming economy on the mainland, which is providing a steady flow of professionals and businessmen.'