Summary

From the birth of the first-generation serviced apartment (e.g. Lijing Mansion) in 1993, to the “investment fever” aroused by some serviced apartment projects such as Zhi Di Yi Xuan and Kingkey Yujing Garden around 2005, up to the more recently released high-end products (e.g. Boutique Apartment, for which, the price reaches RMB23,000 per sq m and over 40% of the purchasers are from overseas), serviced apartment has created numerous miracles in the property market of Shenzhen. As an upgraded executive residential product, serviced apartment is usually equipped with star hotel services, suitable for more diversified functions (either commercial or residential). Besides, the entry threshold for serviced apartment is relatively low, increasing the flexibility and fluidity for investment. With these advantages, serviced apartment becomes popular in the market. However, due to the shortage of suitable land for the development of serviced apartment, the market supply is tight, making the capital value of this type keep rising.
According to the statistics of 2003-2006, nearly 90% of the serviced apartments are concentrated in the two districts of Futian and Luohu, each accounting for 48% and 41% of the total supply respectively. Nanshan, Baoan and Yantian only account for 6.4%, 1.6% and 3.0% respectively, while there is no such supply in Longgang District so far.

Generally speaking, most of the serviced apartment projects are located in the CBD and its surrounding areas. Although the room for serviced apartment development and the potential for price accruement in these areas are relatively limited, the intensive concentration of people, capital and information, convenient transport and well-developed supporting facilities have made these places an excellent location for the development of serviced apartments. According to the current distribution, it can be seen that some serviced apartment concentration areas are under formation, such as Luohu Border Area, Huanggang Border Area, Caiwuwei Financial Centre Area, Shenzhen CBD, Huaqiang North Business Centre and Shekou-Nanshan Business Centre.
The purpose of this report is to provide developers and investors the most updated information on the serviced apartment market in Shenzhen. All the data used in this report are last updated by December 2006.

—— Dec 2006