Summary of Key Points
The first “sub-area development” pilot project in the Northern Metropolis Area of Hong Kong (which accounts for one-third of the city’s area and will be the core of development over the next 20 years) was won by a consortium consisting of six companies: China Overseas Property Development, China Merchants Land, China Resources Land (Overseas), China Travel Service Investment, JD.com, and Sun Hung Kai Properties, for HK$1.03 billion, with a total investment of approximately HK$16.8 billion. The project will include more than 3,000 residential units, commercial facilities, and a smart logistics technology park, creating over 6,000 job opportunities. It marks a crucial step for Hong Kong in shifting from a model of “building buildings first and then attracting businesses” to one where “industry comes first, integrating industry with residential development.”
1. Six Giants Join Forces to Create a Complete Community of “Residential, Commercial, and Industrial Facilities”
This project is not undertaken by a single developer; instead, it is a collaboration of six leading companies from different sectors: China Overseas Property Development, China Resources Land, and Sun Hung Kai Properties, which specialize in residential development; China Merchants Land and China Travel Service Investment, which are involved in infrastructure and industrial development; and JD.com, which focuses on logistics technology. The companies hold similar shares (with China Travel Service Investment holding 15% and the other five each holding 17%), and the total investment of HK$16.8 billion means each company will contribute approximately HK$2.5 to HK$2.8 billion.
The project encompasses four plots of land: three for residential and commercial use, and one for the enterprise and technology park. Upon completion, it will feature 156,000 square meters of residential space (more than 3,000 units), 13,000 square meters of commercial space, and at least 30,000 square meters for the logistics technology park. The entire area will not only provide housing but also employment and shopping facilities, forming a complete ecosystem of a “small community combined with an industrial zone.”
2. JD.com’s Role: Not Just Buying Property, but Bringing Industry
JD.com’s participation in this project is noteworthy. As a company not primarily involved in real estate development, why is it involved? The reason is that the land designated for the technology park will be transformed into a “world-class smart modern logistics center,” and JD.com will be the main tenant. Specifically, JD.com’s logistics division will establish local warehouses and an operations center in Yuen Long, handling overseas warehousing, direct import shipping, same-city delivery, and even unmanned logistics services, creating approximately 2,500 jobs (100 of which will be in technical roles). This brings real industrial value to the area, attracting talent and driving the development of related industries.
3. A Change in Development Approach: From “Building Buildings to Selling Them” to “Industry First”
In the past, when new areas were developed in Hong Kong, residential buildings were constructed first, and businesses were attracted later on. This often led to issues such as an abundance of housing with little population and lack of industrial activity. This time, the approach is different:
- **Evaluation focuses more on “industry” than “price”: The bidding process uses a “double-envelope system,” where non-price factors (such as industrial planning, introduction of leading enterprises, and job creation) account for 70% of the evaluation, while price accounts for only 30%. This means that even if a bid is low, it may not be accepted if the industrial plan is not satisfactory.
- Industry is determined before supporting facilities are built: The technology park is the core of the project, with residential and commercial facilities being secondary. The government requires developers to prioritize the industrial component to ensure the area has the ability to generate its own economic growth, rather than relying solely on selling property.
This approach is akin to planting an “industrial tree” first and then building houses around it, allowing residents to work nearby and truly revitalizing the area.
4. The Northern Metropolis Area: Hong Kong’s “New Hope” for the Next 20 Years
The Northern Metropolis Area is a significant initiative, covering one-third of Hong Kong’s land and capable of accommodating 2.5 million people (about one-third of the city’s population). It addresses two major challenges for Hong Kong:
1. Housing Issues: With high housing prices and shortages, the Northern Metropolis Area will provide a large number of new residential units (for example, this project includes 3,000 units).
2. Economic Transformation: Hong Kong needs new growth drivers in its industries. The Northern Metropolis Area is divided into four key sectors: premium services/logistics, innovation technology, port commerce, and tourism. The Hung Shui Kiu project is part of the logistics hub, and in the future, other industries such as technology and commerce will also be established, driving economic upgrading.
In 2023, the “Northern Metropolis Area Coordination Office” was established, and the first sub-area pilot project was launched this year, indicating that construction is accelerating.
5. More Projects on the Way
This pilot project is just the beginning. Ning Han-ho, the Director of the Development Bureau, stated that the land acquisition for the Fanling North new development area has been completed, and bidding is scheduled for the end of this year. More “industry-first” projects are planned, and the construction of the Northern Metropolis Area will progress rapidly.
For Hong Kong, this is not just about building buildings; it’s about creating a new urban area that integrates industry with residential development, helping the city maintain its competitiveness over the next 20 years. For businesses, it represents an opportunity to participate in Hong Kong’s core development. For the general public, it means more housing options and job opportunities.
In summary, this project marks a turning point in Hong Kong’s urban development strategy, shifting from a focus on residential development to an emphasis on industry, using industry to drive the vitality of the area and ultimately addressing both housing and economic challenges. The future of the Northern Metropolis Area is indeed promising.