Hong Kong tech hub risks delay amidst labour, tenant concerns

The development will take at least 10 to 15 years to fully materialise and current market conditions could slow momentum.

Hong Kong’s ambitious Northern Metropolis project faces significant headwinds as it begins its journey to become a high-tech economic engine, according to Knight Frank.

In its report, Knight Frank said that despite bold plans to transform 30,000 hectares into a hub for innovation and advanced industries, the development will take at least 10 to 15 years to fully materialise, and current labour and market conditions could slow momentum.

One of the most immediate hurdles is a shortage of skilled talent. At present, only around 53,000 workers in Hong Kong are engaged in high-value roles within the Technology, Media, and Telecommunications (TMT) sector — the very industry expected to anchor the new district.

Compounding the challenge is uncertainty around anchor tenants: emerging sectors like biotech and healthcare may struggle to attract major corporate occupiers in the early phases.

Still, the opportunity is vast. The Northern Metropolis is designed to align with China’s 14th Five-Year Plan and serve as a bridge between Hong Kong’s innovation economy and the broader Greater Bay Area (GBA), especially Shenzhen.

With applications spanning smart city tech, AI, healthcare, and cloud services, the district aims to attract investment, top-tier talent, and regional demand.

The city’s TMT sector is showing strong momentum — posting 34.5% year-on-year growth in business receipts in Q3 2024 — and is backed by a growing startup ecosystem and R&D activity.

Meanwhile, healthcare and biotech sectors are receiving government support through tax incentives, fast-tracked approval processes, and a $10b industrialisation scheme.

Development plans include critical infrastructure such as data centres, private hospitals, senior living communities, laboratories, and talent housing.

High-value assets are expected to draw private investment, whilst public-private partnerships will likely support projects with strong social value but lower commercial returns.

Despite its challenges, the Northern Metropolis remains Hong Kong’s most significant long-term bet on future economic transformation — and a bold attempt to redefine its role in the region’s innovation and technology landscape.