Far East adds 205 luxury service flats to its stable
Other operators like Ascott and Fraser also have similar expansion plans
AS DEMAND for service apartments hots up, property developer Far East Organization (FEO) is adding another 205 luxury flats to its portfolio, targeted at well-heeled expatriates.
Already the largest service apartment operator in Singapore, FEO appears keen to capitalise on rising service apartment occupancies and rates, as the improving economy draws more expatriates back here.
Other major service apartment operators such as The Ascott Group and Fraser Serviced Residences also have similar intentions to expand here.
FEO will devote an entire block at its 99-year leasehold, 387-unit project Orchard Scotts in the Newton area to service apartments. The project is expected to be ready for lease by about the middle of next year.
The new flats are believed to be more luxurious than the firm’s 225-unit Orchard Parksuites service apartments behind Wisma Atria mall.
Occupancy at Orchard Parksuites is in the high 90s in percentage terms while rates have climbed by 20 per cent since last year.
Other FEO service apartment properties, including Regency House in Penang Road and Central Place in Hougang, are also reporting occupancies of above 90 per cent.
Like the hotel industry, the service apartment market too was hit by the outbreak of Sars in 2003.
But occupancies and rates have since bounced back, said Serviced Apartments Association president Tan Kim Seng.
In line with increasing business activity in an improved economy, occupancy levels have gone up to about 90 per cent, he said.
‘Rates are creeping up for sure. With limited supply and continued demand, rates will soon go back to the pre-1997 level…That will attract further investments.”
There has not been any significant new supply added to the existing pool of 3,600 service apartment units in Singapore in the past few years.
Mr Kwek Leng Beng, City Developments’ chairman, originally wanted to set aside a block or 130 units of his super-luxurious St Regis project.
‘But if he can sell them at $2,600 to $2,800 per sq ft, why not,” said Mr Tan.
At The Ascott Group, its properties at home are reporting occupancies in the high 80s in percentage terms.
‘Room rates are expected to increase across the industry and we will also be looking at increasing our room rates in tandem,” said an Ascott spokesman. Ascott has said it could add an Ascott property, and one or two Citadines branded properties in Singapore.
Fraser is also keen to grow here. Its two properties, Fraser Suites and Fraser Place, are reporting occupancies in the mid-90s in percentage terms.
joyceteo@sph.com.sg
Far East Organization will devote an entire block of 205 units at its 99-year leasehold, 387-unit project Orchard Scotts to service apartments
Source : Straits Times - 21 Jun 2006
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