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The supply of serviced apartments is slowing after a rush in the late 1990s,
with corporate rents having slumped as much as 20 per cent
More than 20 per cent of the 3,600-plus
serviced apartments in Singapore were opened in 1997 alone, according to an
FPD Savills report.
'Between 2000 and 2002, supply moderated
and stabilised with only three new serviced apartment projects introduced,'
the report says.
In fact, there was no new supply last
year, and potential new units in the next three years total around 200.
These include the Ascott Group's 94-unit Somerset Bencoolen, forecast for
completion by the end of the year, and Hong Leong Holdings' hotel
development in Tomlinson Road. The latter, says FPD, will comprise 100
serviced apartments and is expected to be completed by 2005.
Local serviced apartment operators also
have to contend with the conversion of new high-end, unsold private homes
into 'serviced homes' in recent years.
Occupancy rates have also dipped in the
new millennium, from above 90 per cent consistently in the early 1990s to an
average of about 85 per cent now. FPD notes also that while published rates
remain unchanged, effective rents at some developments include corporate
discounts of up to 20 per cent to retain and attract clients.
Published rents of serviced apartments in
the prime Orchard Road area and vicinity range from $6,000 a month to as
much as $20,000, depending on size and location.
FPD managing director Jonathan Hannam
said: 'With the serviced apartment market in Singapore reaching a new level
of maturity, major serviced apartment operators are now turning their
attention towards the international scene.
'This is evidenced by the news of The
Ascott's intention to acquire the Citadines serviced apartment chain in
Europe and Fraser Serviced Residences' move to expand into Shanghai,
Shenzhen and Sydney.'
Far East Organization is the largest
serviced apartment operator in Singapore with almost a quarter of the
market, comprising eight developments totalling 850 units. Next is
CapitaLand subsidiary Ascott, with an 18 per cent share, FPD says.
- by Vince Chong Singapore
Business Times 21 January 2003
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