Supply of high-end residential properties will likely expand by 15 percent in Shanghai this year, with the majority being serviced apartments, global property services provider Colliers International said yesterday.
Colliers also believed that acquiring high-end apartments to redevelop them into serviced apartments or hotels will remain attractive to investors.
Meanwhile, in the office sector, Shanghai World Finance Center in Pudong New Area has become one of the hottest buildings for tenants seeking quality office space in the local leasing market, according to Colliers' latest quarterly report which was released yesterday.
"In terms of the rental performance, we expect the overall rental for high-end residential properties to grow further mainly due to upcoming supply of high-quality serviced apartments," said Hing Yin Lee, director of consultancy & research of Colliers" East China operations. 'And upcoming events such as the Olympics and World Expo will also help boost demand.'"
Fueled by the surge in residential prices last year, rents in high-end residential properties firmed up in the first quarter of this year though an abundant supply, in the meantime, also caused the overall vacancy rate to grow during the three-month period.
Citywide, overall rents rose 2.2 percent to 175 yuan (US$24.7) per square meter per month and the overall vacancy rate edged up 0.6 percent to 18.1 percent.
Geographically, the ample supply of high-end apartments pushed the vacancy rate in Jing"an District up to 30 percent while Pudong"s fell to 17.8 percent at the end of March on limited new supply. Rents in the two districts rose 1.4 percent and 2.6 percent respectively.
(Shanghai Daily April 9, 2008)
