Serviced apartment rentals in Hong Kong have seen strong increases this year due to the influx of expatriates relocating to the region as a result of the growth of financial institutions.
Edwin Leong Siu-hung, managing director of Tai Hung Fai Enterprise, which owns two serviced apartment projects in Fortress Hill and Hollywood Road, said the group had increased their rents twice this year and would do again before end-2010.
Rents at the apartments in Hollywood Road have now surged by 20 percent, said Mr. Leong.
“We have also raised rents of Shama Fortress Hill twice this year — by 5 to 8 percent on each occasion — and we will raise them again by the end of the year. That will leave total rental growth for the year at Shama at about 15 percent,” he said.
The sector has seen strong leasing activity since early 2010. Rents climbed 3.4 percent in Q3 after a 67-percent increase in H1 2010, resulting in a total increase of 10.1 percent for the year to date, said Anne-Marie Sage, head and regional director of residential leasing and relocation services at Jones Lang LaSalle.
Research conducted by Colliers International pointed to a growing number of expatriate family arrivals in 2010, primarily due to the expansion in the finance and banking industries. This had resulted in robust demand for large serviced apartments, especially those over 2,000 sq ft, Colliers noted. The research also found that an increasing number of tenants were extending their leases by as high as 12 months due to the limited available stock.
Landlords also warned that those who would like to continue staying in their serviced flats should prepare for even higher rents. “Demand is very strong. Our serviced apartment in Hollywood Road is fully let and the occupancy rate at Shama Fortress Hill remained above 90 percent so far this year,” said Leong, who expects another 5 percent to 10 percent increase in rents in the next 12 months.