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Peggy Ye

Hong Kong is testing purpose-built student housing as an alternative land-sale model, as weak demand for commercial sites pushes the government to explore uses that can still attract investor interest.
The Development Bureau on Tuesday invited expressions of interest (EOI) for student hostel development on three commercially zoned sites in Kai Tak, Siu Lek Yuen in Sha Tin, and Tung Chung East, marking the first time the government had proposed selling land through open tender with use restricted exclusively to student accommodation.
The move comes after the government effectively halted commercial land sales due to high office vacancy rates and ample existing supply, amid fears the tenders could fail or be withdrawn due to lack of bids.
Student housing has emerged as one of the few property segments still drawing capital, driven by rising non-local student numbers and a shortage of professionally managed accommodation in recent years.

“It’s always good to see more supply as the demand is heavy,” said Andrew Chan, chief investment officer at Crystal Investment, Hong Kong’s first institutional student housing operator, noting that investor interest would ultimately depend on pricing.
The three sites could deliver about 4,500 beds in total. Under the proposal, the government planned to restrict their use to student hostels and prohibit the sale of individual rooms. Measures were intended to ensure long-term, cohesive operation but also narrowed exit options for developers.
“The EOI explicitly asks the market to comment on user restrictions and marketability,” said Hannah Jeong, head of valuation and advisory services at CBRE Hong Kong, adding that overly tight tenant or user conditions could affect an asset’s investment appeal.
She said the government appeared uncertain whether purpose-built student housing, if subjected to tight user restrictions, could form a strong investment-grade asset, as limited flexibility could affect marketability.
“The use will be limited and therefore affect its future value,” Chan said.
In recent years, student housing growth has largely come from hotel-to-dormitory conversions, which gained traction after the government pledged to increase the enrolment quotas for non-local students at universities, aligned with its goal of building Hong Kong into an international education centre.
Banks have also been more willing to lend to such projects, citing relatively stable cash flows compared with other commercial property investments like shops, warehouses and offices.
Purpose-built developments on newly sold sites, however, present a different risk profile for investors.
“It’s a different play,” said Kavis Ip, CEO of Centaline Investment, which was involved in several hotel-to-dormitory conversions last year. “Ground-up development involves development risk and a much longer timeline, so we would expect higher returns. At the same time, the land price should sit at a much lower range because the land use is limited purely to student housing.”
Centaline Investment is in discussions with several universities on potential collaborations, as it sees the government’s move as a positive signal for the sector.
The government said one or more of the sites could be put up for tender as early as the 2026-27 financial year, subject to market response.


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The Development Bureau has invited expressions of interest for student hostel development on three commercially zoned sites, including one in Kai Tak. Photo: Google Maps

The three sites, including one in Siu Lek Yuen, Sha Tin, are good for 4,500 beds. Photo: Google Maps

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A prime site in the newly developed Kai Tak area, is one of three ares that have been earmarked for the development of tertiary student hostels. Photo: Google map

Siu Lek Yuen in Sha Tin is another are that has been shortlisted for private student hostel development. Photo: Google map

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Government invites interest in three sites for student hostels, signalling a shift from office sites to education-focused development


Government invites interest in three sites for student hostels, signalling a shift from office sites to education-focused development.


Hong Kong tests student housing land sales as office market slowdown curbs tenders

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Government invites interest in three sites for student hostels, signalling a shift from office sites to education-focused development

Government invites interest in three sites for student hostels, signalling a shift from office sites to education-focused development