Luxury residential and serviced sectors, in particular, are seeing a rise in activity Leasing demand for serviced apartments and conventional high-end residential properties is buoyant, but staying in these two types of accommodation can be very different experiences. Most conventional apartments in Hong Kong are provided on an unfurnished basis, although some have basic electrical appliances such as air conditioners, refrigerators, cookers and washing machines. Standard leases for these 'unserviced' properties are for a period of two years. In addition to the agreed rent, tenants are often required to pay management fees, government rates and costs of basic utilities such as water, gas, telephone and satellite or cable TV. For serviced apartments, however, the all-in-one monthly rental that includes all associated costs in the leasing package enables tenants to enjoy hassle-free accommodation, according to Alice Wong, associate director of residential at CB Richard Ellis. 'The flexible lease terms from one month to one year or longer cater for the needs of different tenants, especially expatriates who are working on short-term assignments or those who are uncertain how long they will stay in Hong Kong,' she said. 'Serviced apartments provide flexible temporary accommodation. They are especially convenient for newly arrived expatriates who can focus on settling in with the new living environment.' Serviced flats are fully furnished with standardised furniture, fittings and appliances, and occupants are supported by house keeping or a maid service. In some purpose-built serviced apartment projects associated with hotel developments, tenants have access to hotel facilities including gym, swimming pool, laundry and business centre. Simon Lo, director of research and consultancy at Colliers International, said tenants would need to pay a rental premium for serviced apartments because of the associated services and furnishings. Because the serviced market was a relatively niche one with smaller stock for lease, there were fewer choices of properties and locations for tenants, he said. Traditional locations for serviced apartments are core business areas such as Central, Admiralty and Mid-Levels. Secondary locations include Wan Chai, Happy Valley, Island South and North Point on Hong Kong Island, and Hung Hom and Tsim Sha Tsui on the Kowloon side. 'For conventional residential units, there is plentiful supply in various locations for tenants to choose from. 'But they are less flexible in lease term and tenants have to sign up with the landlords for a fixed term,' Mr Lo said. 'Serviced apartments offer flexible lease terms and allow tenants to move in and out at short notice. Another attraction for tenants is that the units are fully serviced.' Mr Lo said there was a growing trend of more expatriates moving into serviced flats because many business travellers came to Hong Kong for a short-term stay to meet their partners and consultants. Leases ranging from a couple of weeks to three and six months were especially popular with these tenants. Conventional residential properties are attracting a broader spectrum of local and overseas tenants, while serviced apartments have a relatively niche and specific client base. Anton Eilers, head of residential leasing at Colliers International, said tenants of conventional high-end residential properties included senior executives of the banking, finance and legal sectors. Serviced apartments were sought after by corporate tenants in particular. He said tenants should pay attention to the reputation of landlords and the quality and track record of the property management services in the process of finding accommodation to lease. Ms Wong said most of the tenants leasing serviced apartments were expats working for the Hong Kong operations of foreign companies. But she said serviced flats were usually smaller than conventional residential properties and this limited tenants' choice of properties. Another drawback was that tenants would probably not find much of a feeling of being at home because of the standardised interior furnishings, she said. Mr Lo said that leasing for serviced apartments would perform better and they could continue to maintain a rental premium for the provision of quality services which were not available in conventional apartments. Landlords of serviced apartments were also concerned about maintaining a quality living environment for tenants while the lack of new supply in traditional business areas would support a faster rental growth relative to unserviced properties, he said. Demand for short-term stays, ranging from three to six months, would be stronger in particular. Simon Wong, associate director of research at CB Richard Ellis, said the continuous strong interest in serviced apartments had encouraged some landlords and operators to consider raising rents. Others such as the operator of the Atrium in Admiralty had released plans to carry out a major renovation project from next year to increase its market competitiveness. The sustained economic performance, underpinned by many positive factors such as the robust growth in the trade and export sectors, steadily rising inflation, salary increases and the continued improvement in the job market would fuel demand in the residential leasing segment, he said. The trend of multinational companies using Hong Kong as a springboard into the mainland continued to gain pace, which contributed to another major stream of demand for luxury residential leasing properties, he said.