Hong Kong budget hotels move into co-living space, as cheaper alternatives for millennials
Early investors in city’s co-living segment find response encouraging
Hong Kong budget hotels in non-core areas are keen to join other investors to convert their underperforming properties into co-living spaces, as it provides a cheaper alternative for millennials priced out of the world’s most expensive housing market.
And the situation is only likely to get worse, with property prices in the city expected to increase by at least 15 per cent in the next two and a half years, according to property consultants JLL. Rents too have surged for 18 straight months, making it impossible to get a flat for under HK$10,000 a month.
In such a setting, co-living offers an affordable solution to millennials staying with their families, sharing a rental unit or living in subdivided flats.
“We have clients such as budget hotel operators and owners of old properties exploring investment opportunities in co-living spaces,” said Alvin Leung, associate director for valuation advisory services at JLL.
He said hotels in non-tourist areas such as Kwun Tong industrial area that have seen a drop in occupancy rates because of declining group tours from the mainland were showing interest.