Newcomers continue to enter the serviced apartment business in Hong Kong despite warning signs that rentals are being squeezed downwards by oversupply.
GR8 Leisure Concepts, the latest player in the industry, acquired an old serviced apartment building for more than HK$64 million in 2005 and has renovated it into boutique serviced apartments called Knight on Wyndham, which opened for business this month.
The development offers nine serviced apartments with a net lettable space of 357 square feet each. Monthly rents are HK$30,000.
Michael Tiplady, a senior vice-president at GR8 Leisure Concepts, said the rents were about 15 per cent lower than other serviced apartment projects in the area.
'We charge the project slightly below the market level as we are new in the market. We want to establish our brand name and give incentives to the first round of tenants,' he said.
Target clientele will be young professionals staying in Hong Kong for two to three months.
Mr Tiplady said rentals in the industry were under pressure but he foresaw no problem for his project.