Singapore serviced residences market to grow 15% to 20% this year

This is the forecast given by Far East Organisation.

The serviced residences sector is seeing a nice pick-up in demand, thanks to growing business travel and rising tourist arrivals.

Occupancy is now above 90% percent and rental rates have risen by some 15% to 20% last year. The momentum is expected to continue with some operators forecasting another 15% to 20% jump this year.

Far East says demand for the serviced residences will not just come from the traditional banking sector.

“We see demand from construction and the traditional oil & gas sector and the logistics companies. So there is a broad based demand for more and also a demand for better. And Orchard Scotts presents the product which we think will serve the needs of the new market,” said Chia Boon Kuah, COO of Far East Organisation.

However, the supply of serviced apartments is still expected to fall.

“Two of the current services residences are coming down to make way for luxury developments. One of them is on top of Scotts and the other our own Cairnhill Towers. If nothing is done, there will be reduction in serviced residences and I don’t think it will be good for the overall market. We will not help to contribute to the 17 million tourists the tourism board is targeting for 2015,” said Chia.

Far East operates nine serviced residences developments in Singapore, capturing market share of about 25%.

Source : Channel NewsAsia

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