To build the “Study in Hong Kong” brand, the Hong Kong SAR Government increased the admission quota for non-local students in the eight University Grants Committee funded universities from the original 20% to 40% starting from the 2024/25 academic year, and further raised it to 50% in September 2024. This has directly led to a surge in the number of non-local students, skyrocketing from approximately 53,900 in the 2021/22 academic year to about 92,000 in the 2024/25 academic year, an increase of over 70%. Driven by the rising global rankings of Hong Kong universities, the expansion of one year master’s programmes, and favourable IANG visa policies, the inflow of mainland students to Hong Kong remains strong.

Despite surging enrolment, the growth of university-provided dormitory beds has been slow. Currently, institutions can offer only around 50,000 beds—far short of demand. Estimation shows that demand for university accommodation reached approximately 120,000 beds in 2024, leaving a substantial shortfall of about 76,000.

In response to this significant mismatch between supply and demand, both market participants and the government have acted quickly. Between January and October 2025 alone, there were 16 transactions involving the conversion of hotels, guesthouses, and entire residential blocks into student hostels, with a combined value exceeding HKD 6.1 billion. Most of the new supply currently stems from repurposing existing buildings—particularly hotels—whose room configurations and facilities closely match student accommodation needs, enabling shorter conversion timelines and more predictable costs.

The Hong Kong SAR Government has introduced several measures to boost supply. Launched in July 2025, the Hostels in the City Scheme aims to rapidly increase bed spaces in the short term by streamlining approval procedures and offering incentives, such as land premium waivers, to encourage the conversion of commercial buildings and hotels into student hostels. As of January 2026, authorities had received 24 applications under the scheme, representing an estimated 5,000 additional beds.

The scheme not only expands the supply of student accommodation but also provides a clear and supportive framework for developers to enter the student housing market. Hong Kong’s office sector has been under pressure since 2024, with rents and capital values declining across nearly all commercial property segments. By the end of March 2025, the office vacancy rate had climbed to 13.7%, while rents fell a further 1.3% quarter on quarter. The Hostels in the City Scheme, which streamlines the process for converting commercial buildings into student hostels, is expected to inject new momentum into the city’s weakened office market.

The Emperor Hollywood Centre, located at 151 Hollywood Road in Sheung Wan, is one of the premises participating in the scheme. This 27 storey commercial building offers approximately 1,600 square feet per floor and features office units equipped with private pantries, restrooms, shower facilities, co working spaces, event venues, and studios. Northcroft Hong Kong Ltd. has been appointed as the project’s quantity surveyor, with completion targeted for 2027.

The growing momentum behind student hostel conversions represents more than just a response to an acute housing shortage—it signals a strategic shift in how Hong Kong leverages its existing urban assets. By transforming underutilized commercial properties into vibrant, purpose‑built student accommodation, the city has not only ease pressure on its tightly constrained housing market but also breathe new life into ageing or vacant office and hotel stock. This adaptive reuse aligns seamlessly with Hong Kong’s broader ambitions to strengthen its position as a leading international education hub, creating a more supportive environment for global talent while promoting a more dynamic, diversified urban landscape.

Northcroft Hong Kong Ltd. is actively engaged in hostel conversion projects and brings over three decades of experience in hotel and student hostel developments. With our extensive knowledge, proven expertise, and consistent, independent, and professional approach, Northcroft is well positioned to deliver reliable cost management, practical solutions, and long term value throughout every stage of the projects.