Demand for luxury flats to rent still strong, Kerry Properties says
Money is no object when it comes to finding the right home, and entrepreneurs are keen to lease, not buy, and keep their cash for business
Demand for luxury rental properties remains strong, with Kerry Properties re-leasing flats in its "super deluxe" Tavistock development in Mid-Levels at a 30 per cent premium on expiring leases.
Two flats in the development, both 4,860 square feet, and the a duplex of 8,210 square feet are now being offered at more than HK$65 per square foot, compared with the HK$50 per square foot in the previous tenancy agreements signed in late 2008.
The asking price translates to rent of about HK$315,900 a month for what Kerry describes as a "typical unit" in the development, and HK$550,000 a month for the duplex.
"Negotiations with some potential tenants are under way. And two weeks ago we leased another typical unit, even before the latest promotion," said Chu Ip-pui, executive director at Kerry Real Estate Agency.
Tavistock, in Tregunter Path, Mid-Levels, has two duplex flats and 22 "typical" flats, of between 4,860 square feet and 4,880 square feet in size.
The three flats have come up for releasing at the same time as Swire Properties leased a 6,000 sq ft flat at its 12-flat Opus Hong Kong project on Stubbs Road near The Peak for HK$850,000 a month, or HK$142 per square foot.
Chu said the flats in Tavistock became available when three tenants moved out.
"Top executives from financial institutions, mostly expatriates, previously accounted for up to 90 per cent of our tenants, but they now account for 50 per cent," said Chu. "The remaining 50 per cent are entrepreneurs from Hong Kong and other Asian countries and many prefer leasing instead of buying. To buy such a large unit would easily cost HK$40,000 per square foot, or HK$200 million, and from their point of view they would like to invest this in their business."
Chu is upbeat about leasing demand at the top end of residential market because of short supply.
"There are only a handful of developments that can offer such large units," he said, citing as examples Eva Court in Central and Inter-Ocean Court on The Peak.
Kerry Properties said most rental flats near Tavistock were of less than 3,000 square feet, and rents ranged from HK$45 to HK$55 per square foot, depending on their location and views.
Chu said renovation work on Tavistock was completed in the fourth quarter of 2008. A typical flat there has three bedrooms - two of them en suite - a study and a 200 sq ft balcony with full-width collapsible and sliding windows offering a wide connection to and from the living room.
Kerry Properties is part of the Kerry Group, the controlling shareholder of SCMP Group, publisher of the South China Morning Post.