Hong Kong tests student housing land sales as office market slowdown curbs tenders
Government invites interest in three sites for student hostels, signalling a shift from office sites to education-focused development
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land sales due to high office vacancy rates and ample existing supply, amid fears the tenders could fail or be withdrawn due to lack of bids.
“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.