Lei Jun, founder of China’s best-selling smartphone brand Xiaomi, once said he was not interested in property investments. But it took him just five minutes to decide to spend 100 million yuan (US$16.27 million) on a stake in You+, an apartment leasing service targeting young graduates who work in big cities.
Just like their Hong Kong counterparts, many young professionals across the border are complaining about soaring property prices and their inability to buy their own homes. That’s why hostels for youngsters are gaining popularity on the mainland.
Since their tenants are mostly young people, You+ hostels feature trendy and stylish interiors equipped with all sorts of facilities like snooker game room, gym, movie projector and a mini-bar in the common area. A You+ hostel is more like a club than an apartment building for youngsters, China National Radio reports.
Only graduates who are under 45 and single can apply. They also have to pass a psychology test that aims to find out if they are sociable and can fit into the hostel environment.
You+ encourages tenants to interact with each other, which is why the common areas of the building are always filled with people.
This has proven to be beneficial to the tenants, who come from different backgrounds. There, a young entrepreneur meets a freelance writer, or an investment banker plays pool with a freelance writer, or a lawyer watches television with a photographer. They exchange ideas and share experiences, and can also obtain professional advice from each other.
Since they are of the same age bracket, positive vibes pervade the hostel. Tenants infect each other with their optimism and energy.
Monthly rent is around 2,000 to 3,000 yuan (US$325-490), allowing the young graduates to start saving up for their dream homes.
In Hong Kong, the Bauhinia Foundation Research Center is urging the government to build hostels for the young to reduce their housing expenses and help them save for their own homes.
According to the think tank, young couples need to save for 14 years and four months in order to afford the down payment for their first flat, nearly six years longer than the situation in 1991. The hostel proposal can help ease the problem.
There are now two You+ apartment buildings in Guangzhou, providing over 200 rooms in total. After Lei’s capital injection, the operator aims to raise the number of its rooms to 100,000 by 2016. Target locations are first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen.
Local tycoons should perhaps also consider setting up similar ventures in Hong Kong.
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