Stan Group had invested to convert the former industrial building into a hotel (Image: Knight Frank)
A commercial property unit of China Resources Holdings has become the latest investor to bet on Hong Kong’s student housing market, with the state-run firm agreeing to purchase a hotel in the city’s Kwai Chung area for around HK$953 million ($122 million), according to a statement on Sunday.
China Resources Longdation has signed an agreement to purchase the Hotel Cozi Oasis in the city’s Kwai Chung area from Stan Group, the family office of the late private investor Tang Shing-bor, with the goal of converting the property for student housing use, according to a statement from property consultancies Colliers and Knight Frank, which jointly brokered the transaction.
With incidents of US authorities attempting to deport foreign students gaining international headlines and with Hong Kong having relaxed restrictions on mainlanders entry local schools, student housing has become a popular investment strategy in the city, with Stan Group having sold a hotel in Kowloon’s Mong Kok area to an Angelo Gordon-backed venture in August last year.
China Resources Longdation has been among the most persistent institutional investors in Hong Kong’s property market, having acquired a number of commercial assets in the city over the past several years, with this deal marking the group’s first student housing investment.
Stan Group Sales Continue
With Stan Group having struggled with overdue debts and liquidity issues for several years, the 30-storey Hotel Cozi Oasis is one of many properties the firm has been attempting to sell to pay off its creditors.
Stan Tang’s Stan Group has been selling assets in a challenging market
In April of last year CBRE launched a public tender for the hotel indicating a market value of HK$1.38 billion for the 583-room property at 443 Castle Peak Road – near the Kwai Hing MTR station – with that effort closing in June without a transaction. The announced sale price reflects a more than 30 percent discount from the valuation cited last year and is equivalent to more than HK$1.6 million per key.
The Tang family had purchased what was then an industrial building from Hang Lung Properties in 2012 for HK$528 million before investing to convert the property into a hotel which opened in 2018. With the property spanning 292,961 square feet of gross floor area, the transaction reflects a price per square foot of HK$3,253.
The new owner plans to convert the hotel into around 900 beds of student housing, with Thomas Chak, head of capital markets and investment services at Colliers in Hong Kong pointing to changes aimed at attracting students to the location about 20 minutes’ travel from major universities.
“CR Longdation plans to upgrade the rooms while adding student-oriented facilities in the common areas, along with diversified value-added services, to create a modern, high-quality student community,” Chak said.
Student Housing in Style
In their August deal with Stan Group, Angelo Gordon and local developer Wang On Properties paid HK$435 million to acquire the Hotel Ease Mong Kok, or about HK$2.19 million per room.
That Kowloon transaction was followed in November by Centaline Investment, the asset management division of property services firm Centaline Group, acquiring Bonham Residence, a 96-key serviced apartment building near the University of Hong Kong campus for HK$335 million.
In December, City University of Hong Kong secured more housing for its students by acquiring the office portion of the Festival Walk complex in Kowloon Tong from Mapletree Pan Asia Commercial Trust for HK$1.96 billion, with plans to convert that space into accommodation.
In January, China Merchants Commercial REIT, which is managed by unit of China Resources’ Shenzhen hometown rival, China Merchants Group, agreed to purchase the Austin Avenue Hotel in Hong Kong for HK$205.9 million, with the Hong Kong-listed REIT indicating it plans to convert the property into student housing.
China Resources Loves Hong Kong
The acquisition of the Hotel Cozi Oasis refreshes China Resources Longdation’s profile in the Hong Kong market after the company last made waves in the city with the 2024 purchase of a set of five housing estate shopping malls from the Hong Kong Housing Society for a reported HK$1.035 billion.
Willis Mak, head of private clients for Greater China at Knight Frank sees the deal for the Kwai Chung hotel as an indication of increased participation in the Hong Kong market by investors from north of the Special Administrative Region’s border.
“With mainland enterprises becoming increasingly active in Hong Kong’s property sector, Knight Frank believes that Chinese enterprises will further drive the recovery of the local investment market, with more major transactions expected this year,” Mak said.
In February 2024 China Resources Longdation had acquired the Greenwich Village retail podium in Tseung Kwan O from Lai Sun Development and Empire Group for a reported HK$535 million after purchasing the retail portion of a commercial building in the city’s Kwai Fong area for HK$310 million the previous month.
In 2023 China Resources Longdation was reported to have appointed banks for a Hong Kong REIT IPO of its property portfolio before shelving that plan as the HKEX struggled.
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