Singapore’s mid-tier and high-end segment is expected to see a 5 percent to 10 percent increase in its average daily serviced apartment rental rates this year, following a 22-percent decline in 2009, said Savills Singapore.
Savills’ index for serviced apartment rents in the segment indicates a 2.9 percent quarter-on-quarter growth in the first quarter this year, with daily rates ranging from $260 to $320 for mid-tier and high-end service apartments.
“Going forward, the economy is likely to see firmer growth with many multinational companies expecting to increase their headcount this year. The latest survey by Hudson, a US-based employment services firm, shows that 51 percent of the 400 companies surveyed intend to hire in Q1 2010, an increase from 34 percent in Q4 2009. This could lead to a larger pool of expatriates working in Singapore in the coming quarters,” said Savills in a report.
Singapore currently has around 50 developments with more than 4,600 serviced apartments. Another 1,200 units from eight projects are likely to enter the market in the next four years, which include the 370-unit Park Avenue Suites Rochester, 305-unit Park Avenue Residences Changi and the 300-unit Modena Singapore.
The mid-tier and high-end serviced apartments saw their average occupancy rates at 86 percent in Q1 2010, which reflects a 1.5-percent increase from the previous quarter and a 15.7-percent rise from Q1 2009 amid the economic recovery.
The occupancy rate dropped to 70 percent in Q1 2009 from 89 percent in Q3 2008 during the global recession.
Savills noted that more high-end serviced apartments have entered the market in the previous two years, which include Orchard Scotts Residences, Pan Pacific Serviced Suites and Ascott Raffles Place Singapore, with asking rents for one-bedroom units ranging from $16 to $20 psf a month.
“Highlights at the Pan Pacific Serviced Suites include grocery delivery, luggage packing services, a selection of pillow and bath menus and a 20-metre swimming pool filled with mineral water,” noted Savills.