China Merchants Commercial REIT, BGO Fund Buy Hong Kong Student Hostel at 40% Discount
China Merchants Commercial REIT has teamed up with a BentallGreenOak-backed fund to acquire The Quad, a 205-bed student hostel in Hung Hom, for HK$528.5 million, reflecting a 40 per cent discount from the original owner's total investment cost of HK$880 million. The deal marks the REIT's second stud
China Merchants Commercial REIT and a BentallGreenOak fund are picking up a student housing project in Kowloon at a 40 per cent discount from the original owner's total investment cost.
The REIT managed by Shenzhen's China Merchants Land announced to the Hong Kong stock exchange on Friday that it has teamed up with a fund backed by BentallGreenOak China Holdings and Hong Kong's Welkin Links Capital Group to acquire The Quad, a 205-bed student hostel in the Hung Hom area, for HK$528.5 million (US$67 million).
“The acquisition of the property, which is already operating as student accommodation, is consistent with CMC REIT’s strategy of exploring income-generating real estate opportunities in new asset classes,” said China Merchants Commercial REIT’s manager. The REIT owns a 55 per cent stake in the joint venture buying the property, with the BGO-Welkin fund holding the remaining 45 per cent. The JV is paying HK$12,621 per square foot for the property.
The seller of the 184-room property is local developer and investor Easyknit International Holdings. President and CEO Candy Koon Ho Yan told local media last year that the company had invested a total of HK$880 million in the project. The Quad generated HK$18.9 million in revenue in the twelve months ended 31 March and is now 100 per cent occupied, according to a separate exchange filing by Easyknit. The property is operated under a cooperation agreement with student housing platform iRENT, which will remain in force until July 2027.
Situated a five-minute walk from To Kwa Wan MTR station at 470-478 Chatham Road North, The Quad is a 29-storey tower with 3,890 sq m (41,875 sq ft) of gross floor area. China Merchants Commercial REIT and its partners are paying the equivalent of HK$2.58 million per bed for the property. Easyknit obtained the occupation permit for the property in March 2025 and launched it as a student hostel in June of that year.
Easyknit said it intends to use HK$346.3 million of the sale’s proceeds to repay a bank loan secured by the property, with the debt, which is currently under negotiation for an extension, set to mature on 31 August. For the year ended 31 March, Easyknit posted a net loss of HK$435.3 million. “The Board considers that the immediate realisation of value, potential reduction in finance costs and gearing, and enhanced flexibility to redeploy capital into the group’s businesses and other opportunities outweigh the benefits of retention,” Koon said.
Originally holding mainland commercial properties, China Merchants Commercial REIT expanded into Hong Kong’s student housing sector in December by acquiring Austin Avenue Hotel for HK$205.9 million, with that property now being converted for student use. The REIT’s acquisitions are part of a wave of institutional investment in the sector as the city’s non-local student admission quota at publicly funded universities rises to 50 per cent from the 2026-2027 academic year, up from 20 per cent two years earlier. Colliers projects a shortfall of 120,000 student beds in the city by 2028.
