Investors in Hong Kong are increasingly acquiring hotels and office buildings to transform them into student housing, as the city faces a projected near-doubling of accommodation deficits over the next four years. By the 2029-2030 academic year, the shortage could swell to 147,200 beds, up from 76,300 in 2025-2026, according to a June analysis by Jones Lang LaSalle Ltd. (JLL).
As of late April, developers had 16,300 student housing units already planned. Tom Ko, executive director of capital markets for Hong Kong at Cushman & Wakefield (HK) Ltd., noted that purchasers prioritize high-quality assets with strategic advantages, while end-users show a preference for premium locations.
In March, China Resources Longdation Company Ltd. purchased the Hotel COZi Oasis in Kwai Chung for $953 million, intending to repurpose its 583 rooms into approximately 900 student beds. Meanwhile, large-scale nonresidential deals exceeding $100 million totaled $23.2 billion in the first half of the year—a 84% increase compared to the same period last year, according to C&W data.
Office Market Activity Surges
Office acquisitions are expected to stay robust, as firms continue purchasing properties for direct use, according to Antonio Wu, head of capital markets for Greater China at Knight Frank Hong Kong Ltd. The current market downturn has enabled buyers, including mainland corporations and institutional investors, to obtain larger, higher-standard properties at reduced prices.
While the number of office transactions climbed to 297 in the second quarter from 271 in the first, their combined value decreased to $4.16 billion from $4.86 billion, per Rating and Valuation Department figures cited by Knight Frank. The University of Hong Kong acquired an entire office building on Connaught Road West for $4 billion, while DBS Bank (Hong Kong) Ltd. secured six full floors at The Center in Central for $2.62 billion.
Residential Buyers Shift Priorities
Casalino anticipates that mid-range and mass-market properties will lead residential transactions. This is supported by an expanded $100 flat stamp duty exemption, now applicable to homes valued up to $4 million (previously $3 million), effective February 2025. The higher tax on properties exceeding $100 million is unlikely to discourage luxury purchasers, according to Koh Keng-Shing, CEO of Landscope Realty Ltd.
For high-end buyers, interest rates pose the greatest risk, Koh said, adding that the market’s health also hinges on whether Hong Kong’s economic expansion extends beyond financial services. The majority of luxury buyers are Chinese, and over 60% of his clients work in finance, he noted.
