Lower entrance costs, higher returns and fewer regulations attract foreign investors
The mainland's serviced apartment sector is on a strong growth path and the lure of lower entrance costs, higher rental returns and fewer regulatory restrictions is drawing foreign investors to the market, analysts say.
Property consultant Jones Lang LaSalle Hotels forecast that 1,380 new serviced apartments would come on the market in Beijing over the next three years and 3,300 more apartments would be released in Shanghai over the next five years.
Foreign investors entering the market also had their sights on second-tier cities such as Tianjin, Dalian and Hangzhou, where the serviced apartment sector was still in its infancy, it said.
Comparatively unscathed by government restrictions, the serviced apartment sector was becoming a popular target of foreign investors, said Angela Lee, a Hong Kong partner specialising in property law at legal firm Baker & McKenzie.
Singapore-based Frasers Hospitality has taken on the management of a growing number of properties on the mainland.