Top-end serviced apartments in prime areas continue to enjoy a significant rental premium over apartment-like serviced units because of limited new supply, according to Colliers Jardine. While many furnished residential units come with a wide range of services and facilities to attract more tenants, they are not up to the standard of hotel-style serviced apartments. Looking ahead, very few new developments in the coming years are expected to achieve the standard set by Hong Kong Parkview and Parkside. Colliers Jardine said over the next five years, the major supply will include 760 units in two developments at Tsim Sha Tsui and 1,210 units in Central. Tenants looking for quality hotel-style serviced apartments in areas close to Central have limited choices. Serviced apartments usually enjoy a rental premium, ranging from 20 per cent to 80 per cent, above the average of the normal unserviced units. The consultant estimates the average rental ranges from $40 to $60 per square foot a month. The asking monthly rental is $42,800 to $147,000 per unit. Cheaper units command an average of $22 to $30 per sq ft per month. The outlook for serviced apartments largely depends on the spill-over effect of China's accession to the World Trade Organisation on Hong Kong's economy and business growth. The flexible leasing period and terms also make serviced apartments more attractive than conventional flats. Colliers Jardine said the aggregate demand for serviced apartments on three to six-month terms increased significantly to 21 per cent in 2000, from 8 per cent in 1999 and 4 per cent in 1998. A breakdown of transactions showed that the majority of deals done over the past three years were principally in Central, Mid-Levels, Wan Chai and Causeway Bay, where more than 50 per cent of the total grade A office stock are located. The choices indicate that tenants preferred to live close to the Central business district. But some tenants demanded a more spacious living environment for their families, and Hong Kong Parkview and de Ricou at Island South were among the most popular. There are also signs that serviced apartments in decentralised locations are gaining popularity, according to Colliers Jardine. Many hotel operators are transforming their rooms into serviced apartments to meet the growing demand. Chesterton Petty said a few foreign serviced apartment operators, mainly Singapore-based, were looking for opportunities to acquire or manage serviced apartment operations in Hong Kong. They were trying to establish recognition of a branded serviced apartment operation lacking here. According to Chesterton Petty, Hong Kong has 6,529 serviced apartments in 50 projects. Occupancies saw moderate growth last year to the current 87 per cent. Serviced apartments from the 'mid-priced' sector have outperformed the others, with the highest occupancy rate of 95 per cent followed by luxury units, with 85 per cent taken up, and the low-end, at 83 per cent. Chesterton Petty estimated luxury serviced apartment rents at $35 to $56 per sq ft, or $62,000 to $168,000 per unit, a month. Monthly rents for mid- priced apartments stood at around $20,000 to $50,000 per unit, while those in the low-end sector were below $20,000.