Staff reporter

Centaline Group, which operates the largest real estate agency network in Hong Kong, has splurged HK$180 million on its first student apartment project in Tsim Sha Tsui.

The group plans to transform the 63-room Popway Hotel it acquired, near the Polytechnic University, into a student housing project offering about 150 beds. The acquisition price came in at HK$7,300 per square foot, and an additional HK$20 million is earmarked for renovations.

The investment marks the first step of the group's goal to invest in 2,000 to 3,000 beds over the next two to threes years, aiming to make Hong Kong one of the largest student housing investment markets in Asia, said Kavis Ip, president of Centaline Investment.

Centaline is optimistic about the strong demand in the local student apartment market and expects a stable investment return amid the city's pledge to expand quotas for nonlocal students at public universities.

Home to five of the world's top 100 universities, Hong Kong is stepping up to become a global education hub by attracting talent, with the government proposing to double the quota for nonlocal students at eight public universities to 40 percent last year.

Ip added that Centaline has a solid track record in student housing investments in the United States and the United Kingdom. Centaline earlier said it spent US$16 million (HK$124.8 million) in April to acquire a student apartment project in Georgia in the United States, which saw all 148 beds leased out.

Student apartment businesses have been a hot sector in the city recently.

In June, the Hong Kong Metropolitan University said it acquired a hotel in Hung Hom for student accommodation and renamed it MU88. The purchase price was said to be nearly HK$1 billion, or at a record high of HK$15,000 per sq ft, according to property consultancy CBRE Hong Kong.

Earlier in 2021, AEW Capital Management acquired Hotel Sav in Hung Hom for HK$1.65 billion and then turned it into a student hostel called Y83. The project achieved an occupancy rate of over 90 percent in the past two years, CBRE said.

Centaline buys hotel for student housing