Sign of the times
A growing number of tenants are looking for serviced apartments with a long-term lease to meet their accommodation needs against a market with tight supply and fewer properties up for grabs.
Serviced apartments have remained a preferred option for new expatriates as short-term accommodation before committing to a permanent residence. But the market has witnessed a significant increase in demand for serviced apartment units with longer leases.
Simon Lo Wing-fai, director of research and advisory at Colliers International, says more tenants ended up extending their leases in serviced apartments by up to 12 months because of a reduction in suitable leasing stock in the market this year.
'According to our research, the number of long leases, those with terms of six months or longer, accounted for 44 per cent of the total transactions during the first seven months of this year, as compared with the long-term average of 33 per cent for the past few years,' he says.
'The number of short leases, those with terms of six months or less, concluded between January and July this year constituted 56 per cent of the pie, below the long-term average of 67 per cent.'
Xavier Wong, director and head of research for Greater China at Knight Frank, says long-term leases have emerged as a new trend in the serviced apartment sector as more tenants opt for lease terms of six and 12 months rather than several weeks or months.
'In the past, serviced apartments were mainly transitional residences for new expatriates in Hong Kong,' Wong says. 'Serviced apartments have recently become their long-term residences due to their attractive packages, comprehensive services and facilities, as well as a lack of leasing supply in the traditional luxury home market.'
According to Colliers International's latest research, housing budgets for junior staff typically range from HK$18,000 to HK$25,000 per month and they prefer medium-sized one-bedroom units. The budgets for staff in middle management range from HK$50,000 to HK$100,000 per month and those in senior management with budgets in excess of HK$150,000 per month.
On the supply front, Colliers says one of the new serviced apartment projects coming on stream this year is located at Percival Street and Lockhart Road in Causeway Bay called Como Como. It is a conversion development offering 122 serviced flats, largely studio and one-bedroom units with a few duplex and two-bedroom units, according to the consultant.