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High-end residential rent likely to remain high
By Cherry Cao |
March 25, 2010, Thursday
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RENTS for high-end residential projects in Shanghai probably won't feel significant downward pressure this year despite an increase in supply, as rather solid demand from tenants may render support.
About 2,600 units of high-end residential developments, including both serviced apartments and others, are expected to come into the local market between January and December, an increase of 18 percent from 2009, major real estate services provider Colliers International said in its latest report.
"While supply is growing, the increase in number of expatriates - both those boosted by the upcoming World Expo as well as incoming tourists for the six-month event - would help lift market demand, thus easing pressure on absorption and vacancy rate," said Hingyin Lee, director of research and advisory for Colliers' East China operation.
"On this premise, average rental will not face great downward pressure, yet the temporary relapse in demand following the Expo might underlie some corrections in the high-end leasing market toward the end of 2010."
In fact, demand for high-end serviced apartments in downtown or prime locations already turned robust in the last quarter of 2009 amid the return of expatriates coupled with demand brought by the Expo though it's the traditional low season for the leasing market.
Vacancy rate in the Shanghai high-end leasing market held stable at 25 percent in the fourth quarter, unchanged from the previous three-month period, according to Colliers statistics.
Meanwhile, average rental for high-end leasing projects held steady at 151.6 yuan (US$22.20) per square meter per month during the fourth quarter, with serviced apartments registering the best performance compared to villas and apartments.
Between October and December, average rental of serviced apartments in Shanghai edged up 0.5 percent to 239 yuan per square meter per month while rentals of high-end residential apartments and villas stayed virtually flat at 123.2 yuan per square meter per month and 139.7 yuan per square meter per month.
About 2,600 units of high-end residential developments, including both serviced apartments and others, are expected to come into the local market between January and December, an increase of 18 percent from 2009, major real estate services provider Colliers International said in its latest report.
"While supply is growing, the increase in number of expatriates - both those boosted by the upcoming World Expo as well as incoming tourists for the six-month event - would help lift market demand, thus easing pressure on absorption and vacancy rate," said Hingyin Lee, director of research and advisory for Colliers' East China operation.
"On this premise, average rental will not face great downward pressure, yet the temporary relapse in demand following the Expo might underlie some corrections in the high-end leasing market toward the end of 2010."
In fact, demand for high-end serviced apartments in downtown or prime locations already turned robust in the last quarter of 2009 amid the return of expatriates coupled with demand brought by the Expo though it's the traditional low season for the leasing market.
Vacancy rate in the Shanghai high-end leasing market held stable at 25 percent in the fourth quarter, unchanged from the previous three-month period, according to Colliers statistics.
Meanwhile, average rental for high-end leasing projects held steady at 151.6 yuan (US$22.20) per square meter per month during the fourth quarter, with serviced apartments registering the best performance compared to villas and apartments.
Between October and December, average rental of serviced apartments in Shanghai edged up 0.5 percent to 239 yuan per square meter per month while rentals of high-end residential apartments and villas stayed virtually flat at 123.2 yuan per square meter per month and 139.7 yuan per square meter per month.
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