- Foerni, a new online furniture subscription platform, started offering its services to landlords in response to growing interest after the Covid-19 outbreak
- Along with saving on upfront costs, renting furniture allows landlords to bring in higher-quality pieces that can be deal makers
Hong Kong’s property agents and landlords, facing one of the city’s most competitive housing markets in years, have turned to furniture rental as an affordable way to spice up their offerings and help them stand out from the crowd.
Foerni, an online furniture subscription service that was aimed at individuals when it launched this year, saw interest from landlords spike after the Covid-19 pandemic started taking its toll on the local economy.
By the summer it had expanded its services to commercial and residential property managers, allowing them to rent pieces of furniture for individual or showpiece units for anywhere from three months to three years.
Not only did the service prove useful for saving on upfront costs and eliminating the hassle of furnishing, but it is also a cheaper way to bring in better quality pieces that can sometimes end up being the deal maker for a potential buyer.
“Landlords are really now in a position where, probably for the first time in a long time in Hong Kong, they really have to work on setting themselves apart,” said Pauline Wetzer, Foerni’s founder and chief executive. “Not only to get a tenant signed, but also to reach the yield they are budgeting for.”
Units that are well furnished lease at higher prices, they lease faster, they sell more easily, said Charles Slater, a consultant with Habitat Property, which has worked with Foerni on at least four projects over the past few months.
Although Habitat continues to use its own in-house stylists, Foerni helps fill a gap, offering its landlords a simple slate of high-quality, brand-name pieces at prices Slater described as very competitive.
“Very, very few people are actually good at visualising space, at walking into an empty room and imagining how it would look with things in it,” said Slater, implying that good-looking furniture was often critical.
Poorly furnished units, on the other hand, can have the opposite effect, driving away potential tenants. This is where the simplicity and convenience of furniture rental comes in, but what drove Slater to Foerni instead of other competitors in the space was affordability.
To furnish one unit, Foerni offered him an asking price more than five times less than another firm’s. Although this obviously came with a quality difference, said Slater, Foerni still made the most sense.
Furniture rental’s benefits come in other forms as well, offering landlords a degree of flexibility that can reduce the financial risk of pushing furnished property.
For instance, if tenants want to bring their own pieces into a furnished flat, not only does the landlord’s initial investment in the furniture then earn no returns, but the pieces have to be removed and stored. “Maybe landlords don’t think it’s worth it to remove or store the furniture, so they decline the deal,” said Wetzer. “Or they don’t end up really using the furniture, which is bad both financially but also for the environment.”
This upside showed up in a project Slater is currently working on in collaboration with Foerni, at a group of properties in Sai Ying Pun. “For tenants who wanted a furnished unit, we are able to present them with the packages on-site,” he said. “But if they just need a sofa or a couple of individual items, then we’re able to offer total flexibility in terms of what is included.”
The properties received a number of offers immediately, with some clients requesting that the furniture on show be retained, which Slater said was a good sign that the model was working.
Flexibility is also an asset for landlords and tenants given Hong Kong’s uncertain political future, said Wetzer. “With Hong Kong being Hong Kong over the last one-and-a-half years, no one knows for sure where they’re going to be in the next couple of years,” she said. “So the appreciation of having this flexibility is much higher today than it used to be.”