In short
Common areas are the parts of a building all owners use together: entrance, stairs, lift, parking, social facilities and gardens. The service charge is each owner's allocated share of the running and maintenance cost of those areas.
What drives the service charge is not the size of the apartment but the specification of the project. A pool, a gym, round-the-clock security and extensive landscaping create fixed costs independent of the number of units. Two apartments of the same size, one in a well-equipped and one in a plain project, can differ several times over in service charge.
The second driver is the number of units. Because fixed costs are divided among owners, the burden per person rises in a project with few units. A project with few units and rich facilities can look attractive in lifestyle terms while being the heaviest option in running costs.
Why it matters to an investor
This is the item most often forgotten in a rental yield calculation. The net return reaching the investor is what remains after service charge and taxes are deducted from the rent. A yield calculated without the service charge overstates the real return.