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.