Supply of most types of properties in Hong Kong is failing to match growing demand. Serviced apartments are no exception. Top-end suppliers such as Signature Homes are often fully booked, while the occupancy rate for the entire sector was more than 90 per cent in the second quarter of this year. Rents for hotel-like and apartment-like residences rose 2.5 per cent and 1.7 per cent respectively in the quarter.
'Rents have increased by at least 30-50 per cent in the past five or six years, but demand has grown. Moreover, clients' demand for more unique style has given birth to boutique operators who have converted commercial spaces into serviced apartments,' says Edina Wong, senior director of residential leasing at Savills, which provides services to international companies.
Most of Harbour Grand Hong Kong's guests are corporate clients. Its spokesman says the top tenants based on nationalities are from Japan, Britain and Australia, while demand from India is growing, mainly from the banking and information technology sectors.
'More and more people are familiar with serviced apartments nowadays,' says Emily Wong, manager of Eaton House, which runs three properties in Happy Valley and Wan Chai. 'For local residents, they may rent a serviced apartment while having their own house renovated. Moreover, some young people or new couples who can afford the rent would prefer to stay at a serviced apartment.'
Wong says there is rising demand from the mainland from families of pregnant women who travel to Hong Kong to give birth.
In Causeway Bay, Apartment O is a high-end, 16-room building designed in classic Hong Kong style. 'We charge HK$88,000 per month and demand is still there. Clients are corporate users and many are foreigners from Britain and the US. We raised our rent by 20 per cent this year, but it didn't stop the demand and high occupancy,' says marketing manager Cynthia Choi.
Some apartments also offer value-added services. Shama, which operates serviced apartments in locations including Causeway Bay, Hollywood Road and Tsim Sha Tsui, offers a lifestyle programme that grants residents membership of private clubs and fitness centres.
Estate agents such as Land & Fortune Realty receive regular requests from potential customers ranging from newlyweds and couples, to university students. 'The latest newcomer in the sector is the Acquinox Mercury at Tin Hau, which opened in July. I have received more than 20 inquiries. The price trend is definitely heading up. A small 500 sqft room on Hong Kong Island is more than HK$20,000,' a spokesman says.
Ian Strutton, director at Experis, says Asia is enjoying steady growth despite the gloom in the global financial market. 'Demand for M&A [mergers and acquisitions] bankers in Asia will continue to be optimistic.'