| SINGAPORE: Singapore's economic boom is having a positive spill-over effect for serviced apartments.
Rentals are rising as more professionals from growth industries come to town.
A three-bedroom serviced apartment would costs about $8,000 a month to rent.
That might sound a lot, but occupancy levels across Singapore are close to 90 percent.
"Companies now are willing to commit to longer stays upfront as opposed to maybe about a year ago. This is largely due to the economic stability. We also do have strong enquiries from the growth sectors identified by the Singapore government. Specifically the asset wealth management, life sciences, and R&D," said Tonya Khong, General Manager, Fraser Place of Fraser Service Residence.
"Across the board, we're seeing good demand, from the lower end to the highest end. The bulk of the market is in the mid market area. It meets the needs of a very particular niche of the market - people here with families, people here for medium- to long-term, sometimes uncertain lengths of time," said Tan Kim Seng, General Manager for Great World Serviced Apartment.
Market watchers have said rental rates have risen by between 6 to 10 percent in the first quarter of this year over the same period last year.
Although more guests are coming, industry players have said rentals are far from their peak.
At this point, market watchers have said average rental prices range between S$6 to $7 per square foot.
This is about 30 percent less compared to the industry peak in the early 90's.
The prices are also lagging behind those of hotels, which have seen increases of up to 40 percent for the first three months this year over the same period last year.
However, industry players are optimistic about a sustained, though gradual, upward price trend going forward.
"The minute serviced apartments rates rise further, and you'll find that the take-up rate for private residential apartments will improve and that in turn will support the long term higher-end serviced apartments and hotel rates," added Mr Tan.
Property managers have said prices are rising slowly because serviced apartments are a niche market dwarfed by the hotel industry, which boasts nearly ten times the number of rooms.
There are now about 3500 service apartments in Singapore. - CNA /dt
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