Could Hong Kong’s student housing boom lure property giants off the sidelines?

Hong Kong’s largest landlords and developers could get their first formal route into the rising <a href="https://ji<a href="https://jiuniversity.com/a-bad-omen-syria-bans-women-from-university-courses/” title=”A bad omen? Syria bans women from university courses”>university.com/student-mobility-and-motivation-australia-qs/” title=”Student mobility and motivation: Australia | QS”>student accommodation market after the government announced plans to tender land for a purpose-built student hostel this quarter, according to analysts

Development Secretary Bernadette Linn Hon-ho announced on Thursday last week the inclusion of a 1,100 square metre (11,840 square foot) site for student accommodation as one of two land tenders in the October to December quarter

The plot – at the junction of Yuen Shun Circuit and Yuen Hong Street in Siu Lek Yuen, Sha Tin – is expected to provide 600 hostel places

“The tender of a dedicated PBSA [purpose-built student accommodation] site could be an important catalyst for Hong Kong’s major developers to take a closer look at the sector,” said Kathy Lee, head of research and retail consultancy at property consultancy Colliers in Hong Kong

“If the tender terms and land premium allow for commercially tween established local developers and experienced PBSA investors or operators, as it involves new-build development.”

Hong Kong could face a shortfall of 100,000 student beds in the 2027-28 academic year, Colliers estimated

Education-related assets, including student accommodation and education-facility transactions, were the main driver of investment demand in Hong Kong’s property market in the third quarter of 2026, accounting for 43 per cent of the HK$10.7 billion (US$1.36 billion) of deals completed during the period

Recent transactions included Singapore-based Wee Hur Holdings’ acquisition of One Bedford Place, an 18,141 square foot office building in Tai Kok Tsui, for HK$748.8 million in June. Wee Hur said it planned to convert the property into a 500-bed student housing project

Meanwhile, Centurion Holdings had provisionally agreed to buy Yan Wo Building in North Point for HK$364 million, according to Land Registry records dated August 25. The company reportedly planned to convert the property into student housing

While the sector has emerged as one of the most attractive segments of Hong Kong’s property market, major developers have yet to make significant investments

Nicholas To, senior associate director for investment at property consultant Savills Hong Kong, said the lack of large-scale deals did not reflect a lack of interest

“Several big players are actively looking into the student housing segment, but they just haven’t found anything that is suitable for them,” said To

“Many of the properties converted into student housing were worth only a few hundred million Hong Kong dollars and, for big players, those [deals] were too small. This is why big developers and other big groups have not really invested in the sector.”

To also said he expected that the Sha Tin tender could finally open the door for major developers to enter the student housing sector, even as investment yields had moderated to about 5 per cent from 5.8 to 6 per cent previously

“In recent years Hong Kong has seen several student hostel transactions, so yields have slightly declined,” he said. “For new investors, it is less attractive.” — SOUTH CHINA MORNING POST

Source: www.thestar.com.my