Prominent real estate advisor Savills pointed out that with the local market's demand for daily necessities and e-commerce increasing since the outbreak of COVID-19, the “stay-at-home economy” is booming in Hong Kong together with other trends such as “work from home” (WFH).
In real estate market, although the hotel industry has been hard hit due to the decline of visitor arrivals, serviced apartment rental remains relatively stable. In general, those small-to-medium new projects located in chic communities are most popular, recording occupancy rates of 80% or higher.
Amid the city's lockdown and tightening preventive measures, the public dine out or gather less, but cook and entertain at home more than before. The “stay-at-home” trend, therefore, is fuelling online shopping, food delivery and related sectors, leading to the rise of “stay-at-home economy”. For example, the Hong Kong E-Commerce Association data show that local and cross-border e-commerce in Hong Kong have achieved amazing growth in the past few months; and the online auction platform Carousell recorded more than 860,000 local transactions from February to June, which was much higher than the same period last year. The trading volume of furniture-related products has almost doubled; while express delivery services increased in the past few months as well.
Having experienced the 90% YoY drop in visitors and sharp decline of tourism spending, Hong Kong is now targeting local customers. For instance, Tourism Board’s “Hello, Hong Kong” scheme, which got positive response from retailers, encourages residents to explore the city. Similarly, hotels are now creating “staycation” packages appealing to local audience demographic to support their occupancy rates. In terms of serviced apartment market, studio to three or four-bedroom apartments with wide rental range are all gaining popularity among existing and new tenants.
Ms. Sdever Li, Director, Residential Services, Savills Hong Kong Limited, commented: “People tend to pay more attention to living environment when they are forced to stay home due to the pandemic; and we see serviced apartment is becoming a new option as “home” for its safety, comfort and reasonable cost. Compared with traditional hotels, serviced apartments are equally flexible, but the stay period is longer; and they are usually fully furnished, equipped with cooking facilities, have all-day security, services and daily cleaning, providing all the essentials for a safe and convenient top-notch lifestyle experience. As a result, serviced apartments remain appealing to traditional customers such as professional expats, vibrant individuals, cosmopolitan couples and new families, and also attract local customers who are undergoing home renovation.”
“Travel restrictions still exist today and expats who plan to leave Hong Kong often postpone their actions. Therefore, once business travel returns to normal and the economy warms up, the demand for quality serviced housing in Hong Kong will continue to be very strong,” Sdever added, “For example, in The Mercury, an urban-chic hotel and serviced apartment on Mercury Street in Tin Hau, has leased over 90% of the units available, with more than half of the units occupied by foreigners, nearly 40% by Hong Kong locals and 10% by mainland Chinese. The Squarefoot’s ‘Best Urban Serviced Apartment’ award winner last year by now is home to professionals working in leading financial institutions, investment banks and renowned universities. The diversity of tenants reflects current market condition.”