The tenant operates top-tier non-tertiary schools in mainland China and is listed on the Hong Kong stock exchange
A Hong Kong-listed educational group has completed the largest commercial property leasing deal so far this quarter, as the sector benefits from an influx of immigrant and expatriate families to the city, according to a property agency.
The tenant agreed to occupy and transform the entire Tower B at the China Life Center in Hung Hom, Kowloon into a purpose-built education complex spanning about 36,400 square feet, a property agent said.
“This project showcases the successful repurposing of a commercial asset to support Hong Kong’s expanding education sector,” the agent said.
Lai declined to name the tenant, citing a non-disclosure agreement, but said it operated top-tier non-tertiary schools in mainland China and was listed on the Hong Kong stock exchange.
“They had been planning to set up a school in Hong Kong for a number of years now and finally they found a perfect opportunity,” the agent added.
A property agency predicted the education sector would play a sizeable role in real estate investment and leasing in Hong Kong given the shortage of available school spots for children of expatriates and immigrant families.
In the last five years, non-tertiary education groups as well as international private schools had invested HK$1 billion (US$128 million) in real estate, Lai said. On top of that, the sector had leased 280,000 sq ft of space in the past 12 months.
As of the third week of August, education investments, including student housing conversions and educational institutions acquiring commercial properties, amounted to HK$10.7 billion, accounting for 37 per cent of the total so far this year, the agency’s data showed.
The investments and leasing covered both school campuses and administrative facilities for the educational groups, the agent said.
“Education groups are expanding rapidly in Hong Kong and from a real estate perspective, it’s an emerging sector,” the agent said.
The agency said more education groups were likely to seek properties for their requirements given that the 280,000 new residents who settled in Hong Kong via various talent schemes since 2022 had brought 250,000 dependents with them, including children of school age.
The agent said schools were “very selective” when it came to leasing properties and that they did not just take space because it was available.
“It takes a lot of careful planning and discussions before they choose a spot because they would rather have a permanent solution than a temporary one. But when they do find the premises, they invest heavily into that property,” the agent said.
Separately, another agency has sold Smart A, an eight-storey, one-stop education-themed commercial building in Kowloon for HK$320 million. Smart A occupies 348-352 Prince Edward Road West, but the 42,000 sq ft total also includes 70 per cent of 354 Prince Edward Road West, which has the potential to be redeveloped, according to the agency.
The agency did not identify the buyer, but agents said Hong Kong-listed apparel manufacturer and property developer Crystal International Group purchased the property.
Crystal International did not immediately reply to a request for comment on Monday.
The property’s basement and ground floor were occupied by ParknShop, while the first to seventh floors were designated for commercial use, the agency said.
“ Smart A is a well-established tutoring hub in the district, with tenants comprising reputable tutorial centres and related education institutions,” the agent said.
“The property currently generates a monthly rental income exceeding HK$1.3 million, delivering a yield of over 5 per cent,” the agent said. “Upon full leasing of remaining units, the yield is expected to further improve, approaching 6 per cent, highlighting its strong upside potential.”
