In recent years, the commercial building market has suffered from oversupply, resulting in significant losses for many investors. These losses, coupled with high leverage ratios, have brought some investors to the brink of bankruptcy. Just as investors were leaving the market, education-related institutions invested a total of HK$11.1 billion in the first half of this year, entering the commercial building investment market. 
At the beginning of this year, the University of Hong Kong purchased an entire commercial building on Connaught Road West for HK$3.9 billion, and City University of Hong Kong also spent HK$1.96 billion to purchase four floors of office space in Festival Walk, Kowloon Tong, for teaching purposes. In addition to the sales market, the Chinese University of Hong Kong leased six floors of office space totaling 113,000 square feet in New Town Plaza, Sha Tin. Since the beginning of this year, educational institutions have essentially handled all major commercial building sales and leasing transactions.
While educational institutions have strong absorption capacity, their acquisitions and leases are primarily concentrated in areas near university campuses. Therefore, most commercial buildings in non-core areas continue to suffer from oversupply, especially Grade B and C office buildings, which are less attractive due to their age and smaller floor areas.
The government's increase in the proportion of non-local students in tertiary institutions to 50% in 2027 will likely encourage institutions to continue buying large areas of commercial building space for teaching purposes. Simultaneously, there are incentives for these institutions to continue getting entire commercial buildings suitable for student accommodation. Therefore, the education sector will dominate the commercial building investment market in the coming years.
