Developers see a future in small-scale, single-block projects Serviced apartments in Hong Kong have undergone rapid changes in the past decade, with small-scale projects emerging to meet customer requirements. The trend to go for single-block developments with less comprehensive facilities continues as small developers and landlords convert residential and commercial buildings into serviced flats. A typical example of converted projects in recent years is Shama Times Square, in Causeway Bay, which was originally designated as a commercial building. Another small-scale project is Ovolo in Central, which has 21 serviced units. In the early days, serviced apartments in Hong Kong were usually incorporated into hotel or hotel-commercial developments. The first serviced apartment block in Hong Kong, New World Apartments, was completed in 1980 and incorporated in the New World Centre hotel-commercial complex in Tsim Sha Tsui. About 10 years later, Pacific Place Apartments was completed as part of the Pacific Place complex in Admiralty. The Convention Plaza Apartments complex in Wan Chai is another example. These projects shared common features such as a location close to core business districts and a presence within a commercial-hotel complex, said Simon Lo, director of research and consultancy with Colliers International. Fully serviced apartments come with facilities and extras such as cooking utensils, crockery and maid and linen services. Mr Lo said serviced apartments resembled hotel units, except that the latter usually had an additional hotel tax and a percentage for service charges. Tenants of serviced apartments enjoy a wide range of facilities equivalent to those available in hotels. Mr Lo said the government originally grouped serviced apartments into two categories: apartment-like and hotel-like. In terms of land use, apartment-like projects were basically built for residential purposes and were usually small-scale, single-block projects. Hotel-like projects operated like hotels, with the site for development zoned for hotel use. To avoid confusion, in June 2000 the government scrapped using 'serviced apartment' for one of the land-use types for development, Mr Lo said. But the two-tier classification was still in common use in the market, he said. Analysts said the government's decision to drop the term 'serviced apartments' in the land-use list was aimed at tightening control on serviced apartments development and plugging a loophole that allowed developers to build serviced flats similar to conventional residential flats in undesirable locations. Mr Lo said serviced apartments were a popular residential accommodation choices for corporate tenants who wanted flexible tenancy terms. While business travellers were the most frequent users of serviced apartments, expatriates accounted for a substantial portion of the demand. They favoured fully equipped accommodation units because these suggested 'home away from home', he said. The average length of a lease for hotel-like serviced apartments varies from a few days to a week, according to Colliers International. Apartment-like projects are usually let on a monthly basis. An initial deposit is usually required to lease apartment-like units, while a waiver clause is included for most hotel-like projects. Tenants in hotel-like projects enjoy other privileges, such as use of the hotel's facilities and discounts at in-house restaurants.