“As tenant expectations continue to evolve, serviced apartments with outdated facilities are increasingly struggling to remain competitive. Upgrading both physical amenities and technological services is now crucial for operators to meet market demands, preserve asset value, and stay ahead of the competition.”

JAMES MACDONALD, SAVILLS RESEARCH



Rental Market Faces Challenges

• No serviced apartments opened in Q4/2024, while two premium multifamily projects added 523 new units to the market: Shibei CM+ (市北壹棠服务公寓) and Suhe Rebettine (苏河瑞贝庭公寓酒店).

• Demand in Shanghai’s rental market continues to decline. A combination of consumer downgrading, foreign investment withdrawal, and increased supply of affordable rental housing has pressured rents and occupancy rates for serviced apartments.

• Citywide serviced apartment vacancy rates rose by 0.6 ppts in Q4/2024 to 20.1%, up 0.9 ppts YoY.

• Serviced apartment rents decreased 0.9% in Q4/2024, averaging RMB264.0 psm pmth, a 2.4% decline YoY.

• Vacancy rates for premium multifamily properties increased by 0.7 ppts to 20.2%, while rents dropped 2.6% QoQ to RMB172.8 psm pmth.

• Ascott’s new flagship project, Ascott North Bund (北外滩雅诗阁), will launch in February, offering 120 one- and two-bedroom serviced apartment suites.