Curbs designed to try to cool Hong Kong's overheated housing market have given a boost to management service providers, according to Onyx Hospitality Group.
More owners now prefer to hold their properties for long-term leasing rather than sell them, and are turning to service providers to help them maintain their portfolios, the group says.
Peter Henley, chief executive of Onyx, which is based in Thailand, also expects the curbs to lead to more opportunities for the group's luxury serviced apartment brand, Shama, since branding can enhance the rental incomes of properties.
"People are less inclined to buy commercial properties now, and existing owners intend to hold their premises for the long term. Therefore, we come in and help them to look after and manage their premises," Henley said.
The group currently operates five luxury serviced apartment projects under the Shama brand in Hong Kong, and six on the mainland. New properties are scheduled to open in Hangzhou, Chengdu, and Beijing.
Demand for serviced apartments had slowed as the number of expatriates working in the city, the size of their families, and the length of their stays fell, Henley said. "That has been a challenge to our business, but our apartments still run at an occupancy rate of as high as 80 and 90 per cent," he said.
Henley said he remained optimistic about the market outlook, since there would always be a demand from foreign workers for serviced apartments.
As well as the Shama apartments, the group also owns three hotel brands, Ozo, Amari, and Saffron, with 33 properties in Thailand, Malaysia, Sri Lanka, Qatar and Dubai.
Henley flew into Hong Kong from the group's Bangkok office last Friday for the opening of the 251-room Ozo Wesley Hong Kong, in Wan Chai. The group secured the management contract with the hotel owner, the Methodist Church Hong Kong, in February last year.
Onyx invested its own money to renovate the hotel in order to generate higher revenues. "When we took over in February last year we closed the hotel until just a few weeks ago while we refurbished it," Henley said.
Mainland tourists make up 45 per cent of the guests at the Ozo Wesley, he said, adding that the hotel's proximity to the Hong Kong Convention and Exhibition Centre and the Pacific Place shopping mall would attract both leisure and business travellers.
The group was now in talks to add two more hotel management contracts in Hong Kong as part of a drive to beef up its portfolio to as many as 22 in the city and on the mainland over the next four years.
"We have a couple of discussions going on with developers at early stages. But it is difficult and challenging to get the right location and right properties in Hong Kong," Henley said.
By 2017, the group's plan is to increase its portfolio to 65 to 70 operating properties, of which 18 to 22 will be on the mainland and in Hong Kong.