Colliers International, Hong Kong

With a Thick Rental Premium above Standard Apartments in the CBDs

The serviced apartment market has been resilient to the current economic consolidation in the US, according to Colliers International's Serviced Apartment Overview – May 2008.  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."

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About Colliers International

Colliers Macaulay Nicolls Inc. (CMN), operating as Colliers International, is a leading international real estate services company that provides a full range of services to commercial real estate users, owners and investors worldwide. These services include brokerage, property management, hotel investment sales and consulting, corporate services, valuation, consulting and appraisal services, mortgage banking and research. Through greater knowledge and specialization, CMN strives to accelerate the success of all its clients, partners, professionals, management and staff. CMN is a FirstService Company (Nasdaq: FSRV; TSX: FSV.SV). CMN is the largest member firm of Colliers International, one of the world's top commercial real estate services organizations, with revenues of US$2 billion and 293 offices in 61 countries.

Contact Information

May Chow        
Regional Manager
Communications and PR, Hong Kong Marketing
Colliers International (Hong Kong) Ltd
Tel    852 2822 0736
Fax   852 2868 5275
Email: May.Chow@colliers.com

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