Hong Kong: Serviced apartment operators are cutting rates and offering incentives in a bid to boost pandemic-hit occupancy rates.
Serviced apartment rents in Hong Kong fell for seven straight quarters, for a total of 14.5 per cent up to the end of Q4 2020, according to Savills. Average rates fell 12.5 per cent in 2020 alone.
Will Robertson, executive director at agents Nest Property, said: “Whilst hotels can entice locals with attractive staycation packages, serviced apartments rely heavily on business travellers and corporate relocations – with those new to Hong Kong utilising them whilst searching for more permanent homes. The serviced apartment industry, like many, has struggled as a result. With fewer companies relocating employees internationally, occupancy is likely to remain low and once-fixed rental rates are now highly negotiable.”
The sector was already under pressure due to the anti-government protests which saw occupancy rates fall from around 89 per cent in 2018 to 71 per cent in 2019. The average in 2020 was 62.5 per cent, according to Savills, falling from 68.4 per cent in January to 59 per cent in December.
After sealing borders for non-residents last March to contain the coronavirus, Hong Kong saw a 94 per cent year-on-year fall in visitor arrivals to a 36-year low in 2020.
