Hong Kong's ambitious Northern Metropolis project, intended as a technology hub near mainland China, is facing skepticism from real estate developers. The government has committed $19 billion (HK$150 billion) from the city’s currency defense fund to support the initiative, marking the first time in over four decades this fund has been tapped for such a purpose. However, developers privately express concerns about potential oversupply, the difficulty in assessing investment opportunities due to a new operating model, and the lack of detailed planning.
The project, which will span roughly one-third of Hong Kong's territory and aims to address housing congestion, is designed to house cutting-edge laboratories and startups. While the government is implementing policies to incentivize private sector investment, such as phased land premium payments and simplified rezoning, developers are unaccustomed to the industrial park model being used, making it hard to estimate returns. Past government endeavors to bolster innovation, like Cyberport and Science Park, primarily succeeded in filling high-end apartments rather than fostering tech unicorns.
Skepticism extends beyond developers, with environmental groups raising alarms about wildlife impact and public sentiment questioning the benefits for Hong Kong residents over Shenzhen. Analysts, like Tommy Wu of Standard Chartered, acknowledge the project's potential for job creation and tax revenue, promoting economic diversity beyond finance. However, concerns about the project's scale and potential issues mirroring other large-scale developments, like Saudi Arabia’s Neom, persist among researchers such as Brian Wong from Liber Research Community. UBS also flagged the incoming supply of new homes in the Northern Metropolis as a risk to the broader Hong Kong property market recovery.
