Education demand opens opportunity for Hong Kong commercial landlords: Colliers

Rising non-local student demand is creating a window to convert underused office and retail space into education facilities.

The education sector is becoming a new demand driver for the city’s commercial property market, according to Colliers.

In its white paper, Colliers said investors and landlords could unlock value by converting underutilised commercial assets into education facilities.

The trend is being driven by rising non-local student demand and supportive government policies, including the increase of the non-local university student cap to 50% by the 2026/27 academic year.

Student visas reached a record 94,517 in 2025, up from 46,821 in 2022. Non-local students also now account for nearly 30,000 enrolments in international schools, representing an 11% increase from 2022.

At the same time, Hong Kong’s commercial real estate market continues to face elevated vacancies amid corporate downsizing and changing retail dynamics.

Colliers said this gap between rising education demand and underused commercial supply is creating opportunities to repurpose office and retail space into education assets.

Education operators are emerging as premium occupiers due to their long lease tenures, low churn, and counter-cyclical resilience.

Education-related commercial investments, including educational facilities and accommodation, reached $11.1b in the first five months of 2026. This follows $4.0b in transactions in 2025, accounting for 11% of total commercial investment volume that year.

Several major leasing deals have also been recorded in recent years. Nord Anglia International School leased 73,800 sq ft at Harbourfront Landmark in the first half of 2026 for a sixth form centre, whilst Stamford American School took up 95,000 sq ft at Imperial Cullinan in the first half of 2025 for a new senior school campus.

Kathy Lee, head of research and retail consultancy at Colliers Hong Kong, said the city is no longer only addressing student accommodation shortages, but is also facing a growing deficit in teaching and academic space.

“This shift is transforming education into a core real estate asset class, where landlords can unlock stable, long-term income by repositioning underutilised commercial properties,” Lee said.

Beyond leasing, Colliers said some institutions are increasingly pursuing ownership strategies to secure long-term capacity and operational control.

However, the firm warned that converting commercial space into education facilities remains complex. Investors and operators must navigate zoning, land lease, building, licensing, and fire safety requirements, which can affect capital expenditure, timelines, achievable capacity, and yields.

Thomas Chak, head of capital markets and investment services at Colliers Hong Kong, said first movers who secure well-located assets and manage regulatory complexities effectively will be best positioned to capture the long-term yield premium offered by education tenants.

Colliers advised investors and landlords to target assets that allow coordinated building-wide upgrades, act during the current repricing window, and conduct rigorous feasibility assessments before acquisition or lease commitment.