(Bloomberg) -- An influx of mostly mainland Chinese students into Hong Kong is leading to higher rents and more investment in college housing.
Student accommodation has emerged as one of the few remaining bright spots in Hong Kong’s prolonged property downturn, as universities allow more enrollments from non-residents.
From the 2024 academic year, which typically starts in September, the non-local student quota of publicly funded, post-secondary institutions will double to 40% of admissions. With a short supply of university hostels, that’s pushing up demand for private rooms.
“Private student accommodation will be a new investment property asset,” said Oscar Chan, head of capital markets at Jones Lang LaSalle Inc. in Hong Kong. Rents for student housing have soared as much as 15% in the past year, and JLL forecasts a shortage of 22,300 such bedspaces in three years.
Among recent moves by developers, Sun Hong Kai Properties Ltd.’s Townplace West Kowloon, an apartment-hotel, is making exclusive offers to students for rooms starting from HK$15,000 ($1,920) a month. Wang On Properties Ltd. last month opened a private student hostel with 720 rooms, making it among the largest in Hong Kong. Private equity funds have also been converting hotels to student accommodation.
There is a spillover into the mass residential market, where additional leasing demand from students may cause rents to climb faster in the third quarter, after rising 1.6% this year, according to Bloomberg Intelligence analyst Patrick Wong. Potential extra demand for as many as 3,000 units may cut the private residential vacancy rate to 3.9% from 4.1% as of late 2023, he said.
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