Centaline seeks co-investors in US student accommodation property as diversification pays off amid troubling Hong Kong market
- Hong Kong’s biggest property agency group is raising funds to invest in a US$16 million student accommodation property in Ohio
- Move to diversify patchy Hong Kong income emboldened by recent investment gains in Texas and Georgia assets, UK ventures
The group is seeking co-investors for a new US$16 million student accommodation property in the midwest US state of Ohio, it said in a briefing last week. Founder Shih Wing-ching expects the target property to attract a “high level of participation” from interested parties.
Centaline “does not only earn commissions with sales, but participates in managing clients’ investments [in offshore assets] and shares the same destiny with clients until there is a profit,” he said. The plan is to hold the asset for recurring rental income before looking for possible capital gain, he added.
Shih is taking on the Ohio project, emboldened by the group’s recent success in the US and UK markets. In 2019, it co-invested with about 20 others to acquire two student housing complexes near the University of Texas in San Antonio and the University of Georgia, before agreeing last year to sell them for an almost US$9 million profit.
Investors were attracted by the lucrative return of about 30 per cent over a five-year horizon for the properties. The Hang Seng Index slumped 22 per cent in the three years to 2022, while investors lost 2.2 per cent holding Hong Kong government bonds, according to an ICE BofA index.
Centaline’s overseas investments is run by Kavis Yip, the CEO of its Cayman Islands unit incorporated in 2016 to help diversify its commissions-based agency business in Hong Kong. Its current portfolio includes five student housing projects in the UK, while future expansion may involve projects in Australia, Canada and Japan.
