2012 oct 17
http://www.savills.co.uk/research_articles/141285/142893-0
The rise of the shoebox unit
Old stereotypes are swept aside as this new concept catches on.
17 October 2012, Words by Yolande Barnes
We note a rising trend in many cities towards smaller apartments, not just a bit smaller either, but much smaller. This new generation of small units is emerging in world cities across the globe, but is distinct from the shoebox units of the past. In Singapore, 300-sq ft units are being developed in quite substantial numbers, while in Hong Kong, 250-sq ft to 300-sq ft apartments are becoming more common in central locations. Tokyo has long had a reputation for compact quarters and apartments of 200 sq ft to 350 sq ft are the mainstream in the single-occupier rental market. Some older projects even offer units of 80 sq ft. In London, studios as small as 250 sq ft have been available in areas such as Bloomsbury since the 1930s but now specialist developers are starting to build expertly designed units at this size.
What is driving this market?
Shoebox units tend to evoke images of squalid 19th century European slums or even Hong Kong’s notorious caged homes. The reality is very different, as this type of apartment is more commonly occupied by young, single urban professionals or childless couples prepared to sacrifice space for the convenience of city-centre living. Even the term ‘shoebox unit’ (coined in Singapore) is rather emotive (‘boutique unit’? – the hotels got away with it).
Far from being cramped, modern designers have been particularly creative in this market segment (and layouts are crucial). Improvements in domestic appliances have also helped to transform space needs with the advent of flat-screen TVs, laptop computers, electronic books, and so on, eliminating many storage requirements, while under-floor heating releases wall space for furniture.
As economies have undergone a structural shift from manufacturing to services, economic activity has become increasingly concentrated in core locations, putting a strain on often overburdened transport networks. The need for convenience, often as a result of longer working hours (particularly true of global financial markets) has also helped to bolster the popularity of living close to work.
This shift has been made much easier by steadily improving 24/7 social infrastructure, allowing a level of convenience only dreamt of by parents and grandparents. Twenty-four hour convenience stores, take-away services, lifestyle coffee shops to relax in and vast air-conditioned shopping malls, as well as the array of bars and restaurants on offer in the heart of any city, have all lessened our reliance on the home as a place to dwell.
But there are other longer term demographic trends which are underpinning demand for much smaller apartments. More people choose to live alone, couples are getting married later in life and more are choosing to remain childless. Such changes are doubtless down to longer life expectancies, the huge cost of raising a family, as well as different social expectations. This demographic is not looking for the comfort of the suburbs. Not yet anyway.
Another factor is the cost of accommodation which has risen dramatically over recent decades, well ahead of wage growth, and while small shoebox units may command high per sq ft values, lump sums are smaller and more affordable. Buyers are also reassured that they are entering a liquid market place with plenty of room for growth.
Download PDF
http://pdf.euro.savills.co.uk/residential---other/shoebox.pdf
http://www.savills.co.uk/research_articles/141285/142893-0
The rise of the shoebox unit
Old stereotypes are swept aside as this new concept catches on.
17 October 2012, Words by Yolande Barnes
We note a rising trend in many cities towards smaller apartments, not just a bit smaller either, but much smaller. This new generation of small units is emerging in world cities across the globe, but is distinct from the shoebox units of the past. In Singapore, 300-sq ft units are being developed in quite substantial numbers, while in Hong Kong, 250-sq ft to 300-sq ft apartments are becoming more common in central locations. Tokyo has long had a reputation for compact quarters and apartments of 200 sq ft to 350 sq ft are the mainstream in the single-occupier rental market. Some older projects even offer units of 80 sq ft. In London, studios as small as 250 sq ft have been available in areas such as Bloomsbury since the 1930s but now specialist developers are starting to build expertly designed units at this size.
What is driving this market?
Shoebox units tend to evoke images of squalid 19th century European slums or even Hong Kong’s notorious caged homes. The reality is very different, as this type of apartment is more commonly occupied by young, single urban professionals or childless couples prepared to sacrifice space for the convenience of city-centre living. Even the term ‘shoebox unit’ (coined in Singapore) is rather emotive (‘boutique unit’? – the hotels got away with it).
Far from being cramped, modern designers have been particularly creative in this market segment (and layouts are crucial). Improvements in domestic appliances have also helped to transform space needs with the advent of flat-screen TVs, laptop computers, electronic books, and so on, eliminating many storage requirements, while under-floor heating releases wall space for furniture.
As economies have undergone a structural shift from manufacturing to services, economic activity has become increasingly concentrated in core locations, putting a strain on often overburdened transport networks. The need for convenience, often as a result of longer working hours (particularly true of global financial markets) has also helped to bolster the popularity of living close to work.
This shift has been made much easier by steadily improving 24/7 social infrastructure, allowing a level of convenience only dreamt of by parents and grandparents. Twenty-four hour convenience stores, take-away services, lifestyle coffee shops to relax in and vast air-conditioned shopping malls, as well as the array of bars and restaurants on offer in the heart of any city, have all lessened our reliance on the home as a place to dwell.
But there are other longer term demographic trends which are underpinning demand for much smaller apartments. More people choose to live alone, couples are getting married later in life and more are choosing to remain childless. Such changes are doubtless down to longer life expectancies, the huge cost of raising a family, as well as different social expectations. This demographic is not looking for the comfort of the suburbs. Not yet anyway.
Another factor is the cost of accommodation which has risen dramatically over recent decades, well ahead of wage growth, and while small shoebox units may command high per sq ft values, lump sums are smaller and more affordable. Buyers are also reassured that they are entering a liquid market place with plenty of room for growth.
Download PDF
http://pdf.euro.savills.co.uk/residential---other/shoebox.pdf
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