According to ASAP Business Partner JLL, many Hong Kong budget hotel operators and owners of old properties are looking to join other investors to convert their under-performing properties into co-living spaces for millennials otherwise priced out of the world’s most expensive housing market.

Hotels in many non-tourist areas have seen a drop in occupancy rates because of declining group tours from the mainland, and co-living projects could generate higher rental yields with tweaks such as restaurant areas turned into a common zone for tenants or nightly guests.

Serviced apartment and hotel operator Ovolo will launch its first 65-room live-in, co-working space under the Mojo Nomad brand by the end of this year, while Eton Properties is converting a luxury residential project into 270 units, some as small as 80 sq ft, to rent out by the month as co-living spaces to young graduates and investment bankers.

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