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Suffering from low corporate demand, the revenue per available unit (RevPAU) of serviced residences in Singapore has proven to be a mixed bag, reported Singapore Business Review citing OCBC Investment Research (OIR).
The Singapore-based serviced residence portfolio of Ascott Residence Trust was hit the most as it registered a 7.0 percent year-on-year drop in RevPAU, while Far East Hospitality Trust posted a 7.6 percent year-on-year increase.
OIR analyst Deborah Ong noted that this is unsurprising given Far East Hospitality Trust’s low base during the first quarter of 2017.
“According to channel checks, corporate demand for long term stays appear muted,” she said. “Some possible reasons include tightened rules on hiring foreigners and the reduction in minimum rental period for private homes from six months to three months.”
Nonetheless, Ong isn’t too concerned of the proposal by the Urban Redevelopment Authority to allow short-term rental of condominium units on platforms such as Airbnb.
This comes as the 80 percent consent rule is generally a high threshold to cross, she explained.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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