Demand grows for serviced apartments
Furnished and serviced apartments for short-term lease are in high demand and short supply, a report has shown.
The Global Serviced Apartments Industry Report 2013/2014, released by UK company The Apartment Service Worldwide, has predicted continued growth for apartment leases in Australia.
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The increase in staff mobility for many companies around the world means much of this demand comes from the corporate sector, said Apartment Service Worldwide’s CEO Charles McCrow.
"Ernst and Young’s 2012 Global Mobility Study predicts that long-term and short-term assignments will increase by 11 per cent and 20 per cent respectively over the next two years and will inevitably have a positive knock-on effect for the industry,” he said.
"The growth in demand for serviced and furnished apartments has been largely due to the global economic recession, which has forced corporates to seek more cost-effective accommodation for their staff, instead of long-term hotel stays."
Investors wishing to take advantage of this increasing demand can expect good returns but should keep in mind that specialist property managers are required to maximise rental yields, said Apartment Service Australia director Keris Hodge.
"Traditional agents are adequate for unfurnished long-term traditional rentals but in the case of short-term corporate leases, the property management company needs to have a qualified database of corporate clients they can source once the lease expires, ensuring the highest possible occupancy levels and therefore rental yields.” He said.
"Furnished properties leased on a short-term basis usually earn almost double the rental income.”
