It was underpinned by the booming China market, the sustained increase in the number of business travellers, and buoyant demand for residences with flexible lease terms and value-added services.
During 1Q 2008, the average serviced apartment rental in the central business districts (CBDs) was HK$55.40 per sq ft per month, representing a rental premium of over 20% above standard units in the same locality. Meanwhile, the serviced apartment market in the CBDs witnessed a steep imbalance of demand and supply, especially for large-size units, which resulted in individual benchmark leasing transaction in Central. For example, in April 2008, a top-floor penthouse was leased for over HK$600,000 per month inclusive. As the next best alternative for large-size serviced apartments, individual tenants opted for non-CBD areas such as Tai Tam and Repulse Bay.
Amid a tight supply in the market, two major projects will be available in mid-2008. One of the new supplies is The HarbourView Place in West Kowloon, occupying the 50th – 70th floors of The Cullinan II, which will provide 70 suites (464 – 1,623 sq ft) in its first batch. Another new project is Shama in Fortress Hill, of which about 40 units out of the total 90 will be available in mid-2008.
Looking forward, serviced apartments should remain one of the most cost-effective property options for business travellers coming to Hong Kong for a short-to-medium term basis. "In general, demand for quality serviced apartments in the CBDs will be stronger than those in the decentralized areas," said Simon Lo, Director of Research and Advisory, Colliers International, "Rental growth in the serviced apartment sector is expected to be 15% over the next twelve months."
