Development Bureau of Hong Kong: Various measures have been taken to balance the supply and demand of office buildings, introducing flexible mechanisms in the planning of the northern urban area.

On February 12th, at the Hong Kong Legislative Council, the issue of how to balance the supply and demand of private office buildings in different districts to alleviate the worsening vacancy rate, and whether to introduce flexible mechanisms in new development areas (such as the Northern Metropolis) to define the commercial land use, was raised by members. Kenneth Ng, Director of Hong Kong's Development Bureau, stated that in order to promote healthy development of the commercial real estate market and increase demand for private office buildings, the Hong Kong government is implementing various measures, including cautiously releasing land, actively implementing industrial policies, and attracting talent and businesses. As of the end of last year, nearly 70 key enterprises had set up offices in Hong Kong. Most of these enterprises will establish global or regional headquarters in Hong Kong, driving demand for office buildings. When planning the new development area in the Northern Metropolis, Kenneth Ng stated that suggestions will be made to accommodate various uses on certain land to meet the changing market needs. According to statistical data, as of the end of 2023, the total stock of private office buildings in Hong Kong is approximately 13.10 million square meters, with Grade A office buildings accounting for 66%, Grade B accounting for 23%, and Grade C accounting for 11%. In terms of vacancy rates, the vacancy rate for Grade A office buildings has increased from 2021 to 2023, with the overall vacancy rate reaching 14.9% in 2023. The end-of-year vacancy rates for private office buildings of different grades in Hong Kong from 2021 to 2023 are as follows: As for supply, according to the Hong Kong Rating and Valuation Department's "Hong Kong Property Report 2024," the predicted total completion of private office buildings in 2025 is around 136,000 square meters, slightly lower than the approximately 156,000 square meters in 2024. To promote the healthy development of the commercial real estate market, the Hong Kong government has taken measures such as: - Adapting to the current economic environment, office vacancy rates, and anticipated supply, the government has not launched any commercial land projects since the 2023-24 financial year. The last commercial land sold was in Mong Kok in March 2023. - Actively implementing industrial policies to attract talent and businesses and enhance economic expansion and quality. Through strengthening investment promotion and promoting Hong Kong's unique advantages, Hong Kong will attract more mainland and overseas companies and funds to establish or expand their businesses in Hong Kong, including setting up new companies or upgrading and expanding existing Hong Kong companies into regional headquarters, creating further demand for commercial premises and office buildings. According to the latest annual survey by the InvestHK and the Government Census and Statistics Department, the total number of overseas or mainland companies based in Hong Kong increased to 9,960 in 2024, a year-on-year increase of about 10%, reaching a historical high. The number of regional headquarters, regional offices, and local offices in Hong Kong has also increased (with growth rates of over 5%, 4%, and 13% respectively). Additionally, nearly 70 key enterprises have set up offices in Hong Kong by the end of last year, most of which will establish global or regional headquarters in Hong Kong, driving demand for office buildings. - In terms of land planning, traditional office buildings are primarily designated for "commercial" use in statutory plans. Apart from offices, "commercial" zones generally allow for various regularly permitted uses, including hotels, restaurant, shops and service industries, educational institutions, exhibition or conference halls, recreational and entertainment venues, information technology and telecommunications (including data centers, data processing/computer centers, etc.). In other words, the current planning system has already prepared for flexibility, allowing developers to consider commercial uses other than office buildings on "commercial" land in response to market conditions and business considerations. Furthermore, the revised planning guidelines for the Hung Shui Kiu/Shap Shek Kok New Development Area in the Northern Metropolis no longer require a certain proportion of office or retail space to be built on "commercial" land, aiming to provide enough flexibility in planning to respond to rapidly changing market conditions. When planning the new development area in the Northern Metropolis, suggestions will be made to accommodate various uses on certain land to meet the changing market needs. For example, the proposed Tin Shui Wai Science Park subdivision plan indicates land near the proposed Northern Ring Line railway station as "other designated uses" with a designation of "mixed uses," aiming to promote flexible development that includes various uses such as commercial, residential, educational, cultural, and entertainment. - For large-scale development projects, the Hong Kong Development Bureau will maintain close communication with the market industry and seek opinions on the development direction and tender terms of the projects. For example, in December last year, the Development Bureau invited submissions of expressions of interest from the market for the three "area development" pilots in the Northern Metropolis, hoping to gather opinions and suggestions from the market to finalize the details and terms for future open tenders. - The development of the Northern Metropolis is a multi-year development plan that requires flexibility in planning to meet the needs of social and industrial development and adapt to the times. Even though the land use in the Northern Metropolis is already determined in statutory plans, the current planning system allows for applications for planning permission and amendment of statutory plans to make adjustments. The Town Planning Board will comprehensively consider the latest situation.