Chinachem Group's HK$6.4 billion residential tower at 129 Repulse Bay Road - vacant since it was completed five years ago - will now be converted into a serviced apartment project, the group said. Ng Shung-mo, a sales manager for the group, said the layout of the lily-shaped residential building would be altered to suit a serviced apartment project. The developer would not need to pay a land premium for the conversion. The Repulse Bay at 109 Repulse Bay Road is the only serviced apartment building in the area. Its occupancy rate is between 80 and 90 per cent, according to Anne-Marie Sage, regional director of Jones Lang LaSalle's residential department. Monthly rentals at Repulse Bay range between HK$70,000 and HK$86,000, she said, and the average rent works out at HK$37.60 per square foot. Ms Sage expects 129 Repulse Bay to easily achieve similar rates. 'There is lack of stock in all areas of serviced apartments as the boutique-type serviced apartments in the city are being taken on a long-term basis by many single professionals,' she said. Alan Man, senior director of residential services at CB Richard Ellis, expects that 129 Repulse Bay may achieve rentals of HK$50 to HK$60 per square foot. Chinachem bought the site for HK$5.55 billion or HK$16,275 per square foot in 1997 just before the Asian financial crisis - a record price in Hong Kong at the time. Property prices plunged in the wake of the crisis. At the time of completion in 2002, property prices in the area had dropped between HK$8,000 and HK$12,000 per square foot, lower than 129 Repulse Bay's land cost. The 24-storey residential building offered 184 residential units averaging in size from 1,715 sqft to 1,930 sqft, while duplexes measured 3,400 sqft. Initially, Chinachem planned to sell the project at HK$30,000 per square foot in the fourth quarter of 2002, but the prevailing prices at the time led to a change in plans. The company has shown a willingness to bide its time on releasing a project as revealed by Pictorial Garden in Sha Tin which went unsold for many years. As the developer had no pressure on cash flow and wished to maximise sales revenue, development plans at 129 Repulse Bay Road changed several times in the intervening years. In 2003, the company considered converting the residential building into a six-star hotel with 352 hotel rooms and gained approval from the government for this proposal in January 2004. However, by the next year property prices of new residential projects in Repulse Bay had risen to HK$30,000 per square foot. Despite this, Chinachem stuck to its hotel conversion plan until the government imposed a higher-than-expected land premium for the conversion last year. At that point the hotel development plan was shelved and the company went back to the original residential scheme. The serviced apartment proposal is the latest blueprint for the building. Nina Wang Kung Yu-sum, the late chairman of Chinachem, aimed to develop 129 Repulse Bay as the firm's flagship residential project.