Centaline joins rush into student housing market as Hong Kong quota worsens supply deficit
Hong Kong’s expanded non-local student quota is worsening the supply deficit in housing, spiking home rentals
The group is converting the 63-room Popway Hotel in Tsim Sha Tsui into 150 beds for student rentals, founder and chairman Shih Wing-ching said in a phone interview on Monday. This marks the start of its venture to provide 3,000 beds over the next three years, which Centaline hopes can replicate its success in the UK and US markets.
“We see opportunities here as the government has raised the quota on non-local students to study here, which has driven rents up,” he said. “The development of student accommodation is only just taking off.”
Centaline paid HK$180 million (US$23.1 million) last month for the hotel located near Polytechnic University, according to government records, or 53 per cent below the asking price when the owner put up the asset for sale by auction in September last year. Centaline expects to spend HK$20 million on renovations.
Centaline is joining a rush into the market segment. Crystal Investment, the biggest player in the field, Dash Living, and fund manager PGIM are among investors betting on the upside. Hong Kong doubled the quota for non-local postsecondary students, starting from the current academic year, worsening the supply deficit in the market.