CODA Properties has taken advantage of the increased demand for smaller luxury flats in the development of Monte Villa, at 121 Repulse Bay Road, Repulse Bay. ''Smaller luxury flats are coming into vogue,'' said Loh So-Cheen, associate director of Jones Lang Wootten (JLW). JLW is sole leasing agent for the development. At 815 square feet for a two-bedroom apartment and 960 sq ft for one with three-bedrooms, the flats on offer are markedly small by southside standards, but still offer much of the luxury trappings of Repulse Bay at only part the cost. Even the two penthouses which cover the two top floors of the 27-storey tower are smaller than normal, measuring 1,540 sq ft and 1,780 sq ft. But the cost, $34,600 to $46,300 a month for the smaller flats and around $90,000 a month for the penthouses, is within many executives' budgets. Ms Loh said expatriates and returning Hong Kong residents faced with tightened housing allowances do not want to give up their luxury lifestyles in the face of increasing rents. More likely they are keeping their sea views and private car parking space, but moving into smaller flats. ''There is a trend toward smaller flats because the expatriates coming to Hong Kong are having their housing allowances cut and they are finding that they can no longer afford to move into the huge 2,000 to 4,000 sq ft flats that they are used to,'' Ms Loh said. Landlords, even in the luxury end of the market, are facing a certain amount of tenant resistance to very high rents. Joyce Li, leasing administration manager for the developer Coda said: ''Some of the local people returning from overseas on expatriate packages simply are not prepared to pour all of their income into their monthly rent cheque.'' Ms Li said that Coda took a calculated gamble in developing such small flats. But the firm believed that if it provided all the amenities of luxury living, like a well equipped kitchen, full sea view and a parking space, the flats would prove popular. Monte Villa features an initial four storeys of parking, one floor for a clubhouse and one floor reserved for the owner. There are 38 flats for lease with tenants occupying the 7th to the 25th floors. The 26th and 27th floors are taken up by two multi-storey penthouses. On the 18th floor, the rent for the 815 sq ft flat is $40,100 while the rent for the adjoining larger flat is $46,300. According to Ms Li, leasing of Phase One is complete and there is a 50-50 split between expatriates and returning Chinese tenants. She said that on inspection, people commented that the bedrooms and bathrooms seemed smaller than expected. The master bedrooms in these units measure 100 sq ft while the smaller bedrooms are 70 sq ft and the bathrooms 40 to 50 sq ft. Phase Two of the project has just been unveiled and so far 25 per cent of the flats on floors 13 to 18 have been leased, Ms Li said. The average rent is about $57 per sq ft. Ms Loh said some of the rents ''are on the high side'' for luxury accommodation in the area. An average rent in the Repulse Bay area is around $40-42 per sq ft for a flat of 2,000 sq ft or more. Rents for townhouses are similar in the area and cover 3,000 sq ft or more. An average monthly rental would equal between $88,000 and $100,000 per month. Newer developments like Sino Land's Royal Cliff offer larger than average size flats (3,200 sq ft) with a higher than average cost of $51 per sq ft. Flats in Kailey Properties' Helene Tower, which measure between 1700 and 1900 sq ft rent for about $85,000 per month or roughly $45 per sq ft. Ms Loh said that the sea view accounted for part of the higher cost of each unit. Whether living on the fifth floor or on the 18th floor, every flat has a great view of the ocean. ''The living room, the dining room and the bedroom all have a wonderful sea views,'' she said. Ms Li said appliances such as a washer-dryer and a microwave oven were an incentive to tenants. The development also enjoys easy access to Central, she said. ''We have a good location and a view that is full, perfect and unspoilt,'' she said. DEVELOPMENT: Monte Villa, a 27-storey apartment block at 121 Repulse Bay Road, Hong Kong Island. DEVELOPER: Coda Properties Ltd. FLATS FOR LEASE: 38 small flats and two larger penthouses. SIZE OF FLATS: 815 square feet includes two beds, two baths; 960 sq ft comes with three beds and two baths. Two penthouse suites measure 1,540 sq ft (three beds, two baths) and 1,780 sq ft (four beds, two baths). RENTAL CHARGES: Rents for the smaller flats (815 sq ft) on the fifth floor begin at $34,600 and rise to $40,100 for those on the 18th floor. For the larger flats (960 sq ft), rents start at $40,800 rising to $46,300 on the 18th floor. Rents for floors 19 to 25 have net yet been determined. The smaller penthouse is leasing for $90,000. No rent has been set for the second penthouse. MANAGEMENT FEES: $2,600 per month for the 815 sq ft flats; $3,000 per month for the 960 sq ft flats; $4,000 per month for the 1,540 sq ft penthouse; $4,800 per month for the 1,780 sq ft penthouse. LEASING: Floors seven to 18 now leasing. Already more than 25 per cent leased. Can also lease higher floors if required. ADDITIONAL FEATURES: Monthly rentals also include one car parking space per flat (two for penthouse dwellers). Extra car park space $1,500 per month. Electrical appliances: oven, gas cooker, microwave, fridge, washer, dryer. Car park management fee: $100 per month. FACILITIES: swimming pool, playground, sauna, sea-facing sun decks.