Student accommodation has emerged as Hong Kong’s fastest-growing real estate segment, drawing in developers, global investors, and universities as demand surges alongside rising enrollments from mainland China. The government’s push to strengthen the city’s role as an international higher-education hub is creating a new revenue stream and fueling investor interest in purpose-built student housing. Reeves Yan, head of capital markets for Hong Kong at CBRE, noted that investor enthusiasm is high, with newly built units leasing out almost immediately thanks to year-long rental commitments that generate strong cash flow.
Policy momentum is accelerating the trend. Chief Executive John Lee Ka-chiu announced plans to expand the Hostels in the City Scheme to include redevelopment sites, easing rezoning rules for buildings converted into student dorms and allowing developers to retain high plot ratios. Additional land for dedicated hostel projects will also be released this year. At a recent Singapore conference, Blackstone’s Pak Man-yuen highlighted hotel-to-student-housing conversions as one of the region’s most compelling opportunities, especially for underperforming properties suited to mixed residential strategies.
Transaction activity reflects the surge in demand: Colliers reported HK$3.2 billion ($412 million) in dorm-related deals in the first nine months of the year, nearly doubling 2024 levels and accounting for 15% of property investments above HK$100 million. Student visa approvals have climbed sharply, more than doubling to 74,466 since 2020, and Colliers estimates a shortfall of around 120,000 beds by the 2027/28 academic year. Developers are responding—Wang On Properties, led by Nick Tang, partnered with Angelo Gordon to convert a hotel into Sunny House, a 720-unit property now operating at 98% occupancy, and the partners acquired a second hotel in July. Institutional investors including Angelo Gordon, AEW, and PGIM have backed HK$4.6 billion in student housing projects since 2021.
Investor appetite is supported by the HKSAR’s broader education strategy, which includes raising the cap on non-local undergraduate enrollment and reserving land in the Northern Metropolis for a planned university hub aimed at attracting mainland and international institutions. Market participants such as Midland Holdings’ Gordon Tse point to tightening US visa policies as another factor pushing students toward Hong Kong, further bolstering long-term demand for student accommodation.
Source: China Daily
