MARKET BACKGROUND

Since the entry of Oakwood Gold Arch Residence Guangzhou on Ersha Island to the market in 2000, the Guangzhou serviced apartment market has developed for more than two decades. The city has experienced rapid growth and foreign trade since China’s reform and opening up, which fuelled the sectoral market development and attracted a series of internationally well-known serviced apartment operators such as Ascott, Frasers, and Oakwood as well as several leading hotel brands such as the Ritz-Carlton and Rosewood to tap into the market.

DOMESTIC TENANTS INCREASINGLY DRIVING DEMAND

Leasing demand initially derived from long-term stay hotel expatriate tenants that desired larger units, greater privacy and tailored services and amenities. This demand base created a relatively stable market with the citywide vacancy rate remaining below 20% from 2010 to 2019. 

The outbreak of COVID in 2020 and stricter border controls greatly dented demand from the expatriate community that was unwilling or unable to return to China, pushing up the citywide vacancy rate to a historical high of 30.1% in Q2/2020.