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Salina Li

Investors are snapping up Hong Kong properties at steep discounts and transforming them into student accommodation, as rising housing demand from mainland students drives rents in the city to an all-time high.
Crystal Investment, which owns Y.X, the largest student accommodation provider in Hong Kong, bought two properties for HK$343 million (US$44 million) in the last four months, according to Andrew Chan, the chief investment officer.
In late April, the company acquired Hotel Ease in Lai Chi Kok from the family of late “Shop King” Tang Shing-bor for HK$220 million, according to Chan.
The 21-storey hotel, which was refurbished in 2022, was estimated to be worth HK$410 million last June when it was put on the market, according to JLL, the agent for the sale.
Crystal also completed the transaction of a foreclosed residential building in Hong Hum last month for HK$123 million. The 25-storey property, completed in 2020, was estimated to be worth between HK$400 million and HK$420 million when it was put up for auction in early 2023, according to local media reports.
“We’re optimistic on the supply and demand issue regarding students for a long time,” Chan said. “The main reason we’re in this business is because we see that the government has put a lot of effort in building Hong Kong as an education hub.”
The city has all the requirements that can help it become a major international education hub just like London, and certainly a leading one in Asia, he added.
The Hong Kong government’s doubling of the quota for non-local post-secondary students, starting from the current academic year, bodes well for student accommodation operators. Nearly 74,000 non-local students are enrolled in colleges in the city, but government-funded student hostels only offer 38,000 beds, according to a Colliers’ report on student accommodation released on Monday.
As of the first half of 2024, Hong Kong had nine privately owned student accommodation projects offering 2,787 beds. Y.X is the largest provider, offering a total of 971 beds in four projects, according to Colliers.

Rents of student accommodation vary and depend on many factors. For example, Y83 in Hung Hom has a total of 800 beds, according to its website. A single room with an area of about 140 sq ft to 160 sq ft is available from HK$13,200 per month. Shared rooms are around 150 sq ft to 160 sq ft, with monthly rents starting from HK$8,100 per bed. Each room is fully furnished and the price includes water, electricity and internet. Tenants also have access to a fitness room.
“Many of the recent transactions by student-accommodation investors for converting hotels have been in districts in proximity or with convenient transport networks to universities,” said Thomas Chak, co-head of capital markets and investment services at Colliers Hong Kong. “Hung Hom, Sai Ying Pun, Ta Kok Tsui, San Po Kong, Cheung Sha Wan are some of the districts preferred, given the clusters of universities and educational premises.”
Other transactions this year include the 63-room Popway Hotel in Tsim Sha Tsui, which was sold for HK$180 million to an entity linked to Centaline Property Agency’s founder Shih Wing-ching, according to local media reports. The price was 53 per cent lower than the HK$380 million asking price when the asset was offered for sale last September.
In January, global investment firm PGIM partnered with Dash Living to buy the 56-room Ovolo Sheung Wan for HK$320 million, with the aim of turning it into co-living accommodation for short and long-term stays.
Even developers are taking a stab at the segment. Recently, Wang On Properties made its first foray into the sector, turning the 695-room Pentahotel in Kowloon into a 720-room property targeting student renters.
With an estimated 25 per cent of local full-time students and all non-local full-time students in post-secondary courses needing accommodation, the demand is expected to reach 175,000 beds by 2028, Colliers said. This will result in a shortfall of about 120,000 student beds, the property consultancy added.
Meanwhile, the strong rental demand from the rising inflow of mainland students has bumped up Hong Kong rents, which are now flirting with an all-time high seen five years ago.
The official rental home index in July rose 1.1 per cent month on month to 194.1, taking the gauge 6 closer to the peak of 200.1 recorded in August 2019.
“The potential shortage in student bed space will fuel future investment in student accommodation assets,” Colliers’ Chad said.
The emerging asset class will see more hotel and co-living sector operators convert their properties into student accommodation, he added.


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The campus of the University of Hong Kong. Rising number of overseas students is pushing demand for student accommodation in Hong Kong. Photo: Elson Li

Student accommodation provider Crystal Investment operates Y83 in Hung Hom. The  Photo: Google

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Investors are converting discounted properties into student accommodation in Hong Kong, eyeing high demand and potential for growth


Investors are converting discounted properties into student accommodation in Hong Kong, eyeing high demand and potential for growth.
