Development chief dismisses fears Northern Metropolis supply will hit office sector

Hong Kong’s development chief has dismissed concerns that commercial floor space in the Northern Metropolis megaproject will further depress the city’s struggling office market, stressing that incoming supply is primarily for the innovation and technology (I&T) sector.

Secretary for Development Bernadette Linn Hon-ho told the Legislative Council on Thursday that the 1 million square metres (10.8 million square feet) of economic floor space to be provided in the megaproject next to the Shenzhen border over the next five years was unrelated to traditional office supply.

She was responding to a question from real estate and construction sector lawmaker Augustine Wong Ho-ming, who voiced concern during a debate on the city’s first five-year plan and annual policy address that the additional commercial floor space could aggravate already high office vacancy rates in non-prime locations.

“Hong Kong is currently undergoing economic restructuring and a reshaping of corporate operating models. Office vacancy rates outside the prime areas remain high,” Wong said.

“When planning industrial space in the Northern Metropolis, has the government comprehensively reviewed and timely adjusted the planning of commercial land and the pace of land sales outside the Northern Metropolis?”

According to Rating and Valuation Department figures, the vacancy rate of private offices stood at 17.6 per cent in 2025, the highest in more than four decades. Office prices and rents also fell by 13.6 per cent and 3.2 per cent year on year, respectively, in the last quarter of 2025.

Linn said the new commercial floor area in the metropolis, which aims to transform about 30,000 hectares (74,132 acres) of land into a technology hub and serve as an economic engine, would not dampen the subdued office market.

“This 1 million square metres of economic floor space primarily comes from land in the Lok Ma Chau Loop area and the San Tin Technopole,” she said.

“It is floor space for the innovation and technology industries and is unrelated to traditional commercial floor space.”

Linn added that the government was preparing to launch the second “large-scale land disposal” project for the Fanling North new development area and had been in contact with interested developers, following the tender announcement for the first pilot site in Hung Shui Kiu in August.

She also said the government would continue implementing diversified land-development approaches to facilitate businesses’ participation in the Northern Metropolis and continue rolling out administrative measures to cut red tape and accelerate development.

The second day of the three-day Legco debate also covered artificial intelligence (AI) risk governance and tourism.

Secretary for Justice Paul Lam Ting-kwok said that, before completing the review of AI risks and related legislation, the government would consider publishing guidelines for minors’ use of artificial intelligence.

He stressed the importance of education in the proper use of AI, noting that the guidelines would also target parents and teachers to help guide children in protecting themselves.

Secretary for Culture, Sports and Tourism Rosanna Law Shuk-pui said that Hong Kong received 40.7 million tourists over the first three quarters of this year, a 12 per cent year-on-year increase. During the seven-day National Day “golden week” break, the city also recorded 1.41 million inbound trips by mainland visitors, above expectations.

Law said she was confident the city could meet its full-year target of 53.8 million visitors.

She also noted that the International Lantern Spectacular in Victoria Park, organised by the Hong Kong Tourism Board, had attracted 730,000 visitors and had successfully boosted nearby restaurants and retail businesses.

Chief Executive John Lee Ka-chiu last month unveiled the annual policy address alongside the five-year plan, which aims to align Hong Kong’s development with the national development strategy.

The two documents set out initiatives to accelerate the Northern Metropolis and strengthen the city’s position in finance, aviation, maritime services, trade and technology.