Northern Metropolis to anchor First Five-Year Plan: Morgan Stanley

Key focus areas include its execution and talent attraction.

Hong Kong is expected to keep the Northern Metropolis at the centre of its First Five-Year Plan, with few major housing policy changes, Morgan Stanley said ahead of the government’s 2026 Policy Address. 

Key focus areas will include the metropolis’ execution, talent attraction, and housing supply, the bank said in its market update on 14 September.

It further expects more targets to be announced in the address, including those covering land resumption, infrastructure, and the tender plan for the next major land disposal sites after the Hung Shui Kiu award.

However, high construction costs, long payback periods, and uncertain returns will remain key challenges for local developers investing in the Northern Metropolis. 

Morgan Stanley said private-sector participation remains key to execution, noting that developers are seeking public-private partnership terms, flexible land-premium payment, MTRC tender coordination, and district-based development models.

“We expect more consortium-led participation, potentially with PRC SOE developers partnering local developers,” it added.

The government unveiled the Northern Metropolis Development Strategy on 6 October 2021, covering the Yuen Long District and North District. In 2025, Chief Executive John Lee announced a new committee for the project’s development.

Lee is expected to deliver his 2026 Policy Address on 16 September, alongside Hong Kong’s First Five-Year Plan.

Morgan Stanley also expects enhancements to tax regimes for funds, family offices, and carried interest, which could attract more capital and talent into the city.

These measures could benefit core office landlords in Central and Admiralty, it added.