With most hotels in the city fully occupied, a growing number of executives on short assignments are looking for leases of up to three months MORE EXPATRIATES are taking up serviced apartments for one to three months as a result of the rising trend of short-term assignments. Colliers International research and consultancy director Simon Lo said shorter tenancies were becoming popular and serviced apartments were the preferred accommodation. In the first six months of this year, leases of one to three months accounted for about 67 per cent of all leases in the serviced apartment market. This compared with about 53 per cent for the whole of last year and 2002. Mr Lo said demand was especially strong for one-bedroom and two-bedroom serviced flats. 'The smaller units are popular. Tenants have to make reservations with landlords in advance to secure accommodation,' he said. The increased occupancy rate in hotels as a result of more tourist arrivals had lent support to the growth of serviced apartments, he said. 'With hotel occupancy at more than 80 per cent, people looking for short-term stay have difficulty finding hotel rooms. Smaller serviced apartments also have low vacancies,' he said. Mr Lo said some expatriates failed to find suitable serviced apartments on Hong Kong Island because of the tight supply and had to look for alternatives in Kowloon. FPDSavills senior director of residential leasing Edina Wong said more single expatriates were coming to Hong Kong on three- to 12-month assignments. Many were analysts and research staff of financial companies, and a high percentage were Asian. Sometimes, they came to Hong Kong for training and many were looking for serviced apartments in the $11,000 to $25,000 a month bracket. FPDSavills senior director of research Simon Smith said the Guangzhou Trade Fair this month also attracted people to Hong Kong, thus boosting demand for short-term accommodation. He said the global economic recovery and the gradual opening up of China's market would lead to the arrival of more expatriates. Hong Kong's admission scheme for mainland workers would increase demand for short-term accommodation, while more local people, mainly singles, were looking for affordable serviced apartments, he said. Knight Frank residential manager Victor Yuen said multinational companies preferred bringing in expatriate employees on short-term contracts, usually from three months to one year rather than two-year contracts. As a result, serviced apartments were positioned well to meet such demand. Occupancy of serviced apartments in Central, Wan Chai, Causeway Bay and Tsim Sha Tsui were about 90 per cent, he said. From the middle of last month to the middle of this month, most buildings in these prime districts were fully occupied due to more short-stay demand from business visitors for international trade fairs in Hong Kong. Mr Yuen said: 'The trend of employing short-term contract staff will probably continue. More foreign companies are sending expats to Hong Kong to investigate China's opportunities.' More mainland Chinese companies operating in Hong Kong are upgrading housing for their staff and this could benefit the serviced apartments sector. Leasing activity gained momentum in the third quarter of this year and landlords are not willing to give discounts to tenants committing to short-term leases of one month or less. Mr Yuen said: 'The recovery of the residential market has brought new customers to the serviced apartments market. They include landlords whose residences are under renovation, flat sellers who require short-term residence after selling their properties and flat purchasers who are waiting to move into new flats.' He expected demand for serviced flats would continue to grow and more investors and developers would convert their properties into serviced apartments to reap better returns.
