26 Sept 2016
Architecture Industry in Hong Kong
- The quality of Hong Kong's design expertise on a wide range of building types and development projects is comparable with the best in the world.
- Hong Kong is a leading expert in high-rise design, slope design, high-density design and designing with space constraints. It is renowned for the high-rise buildings typified by the skyscrapers in Hong Kong’s central business district, showcasing the innovative application of building materials, technology and designs with the versatility of Hong Kong's architects.
- The exports of professional architectural services play a prominent part in Hong Kong's architecture industry - many Hong Kong companies are involved in residential, offices, commercial developments, as well as urban planning and infrastructure projects overseas, including the Chinese mainland, Asian and the Middle East regions.
- Hong Kong's exports of architectural, engineering, scientific and other technical services increased by 7.7% to HK$4,107 million in 2014.
Range of Services
Architects perform a diversity of functions which can be broadly grouped under three categories, namely planning, design, and development.
At the outset, a design plan is required to set up the project, commonly referred to as a master plan or concept design. It is the initial creative part of the assignment.
Once a master plan or concept design has been devised, detailed design drawings are prepared for submission to the necessary government departments for approval. Construction drawings and specifications are then prepared for construction purposes. Knowledge of local rules and regulations is important in this stage.
This stage is primarily associated with the supervision of construction work. It is usually the longest and most involved part of the project. Hong Kong’s architectural firms are renowned for their project management expertise, giving assurance to effective control over quality, cost and project time.
All practitioners have to register with the Hong Kong Institute of Architects (HKIA). Currently, the HKIA has more than 4,000 members. Most of the architect firms in Hong Kong are locally owned. Attracted by the business opportunities in the region, a number of foreign architects have come to work in Hong Kong.
Exports of services
Many overseas projects for Hong Kong architects are assigned by Hong Kong-based companies investing overseas, and the Chinese mainland is the largest export market for Hong Kong's architectural services. In recent years, the construction markets in Middle East and Southeast Asia have attracted Hong Kong architects as well. Well-known architectural firms, such as P&T and Aedas, have established offices in Thailand, Singapore and the United Arab Emirates (UAE), participating in both residential and commercial projects.
Hong Kong's exports of architectural, engineering, scientific and other technical services increased by 7.7% to HK$4,107 million in 2014.
Industry Development and Market Outlook
Increasing local opportunities for architectural firms
Since the ten major infrastructure projects were announced in 2007, the local demand for architectural services has shown signs of increase. In addition, with the government undertaking revitalisation of heritage sites, a lot of opportunities are being brought to Hong Kong architects and construction engineers. For example, for the conversion project of the Murray Building in Central, the government rezoned the site and annotated it as “Building with Architectural Merits Preserved for Hotel Use”. In November 2013, the tender was awarded to a Hong Kong-based real estate company to convert the building into a luxury hotel. In June 2015, three projects under the Revitalising Historic Buildings Through Partnership Scheme were selected for revitalisation (RHBTPS), namely, No. 12 School Street in Tai Hang, the Old Dairy Farm Senior Staff Quarters in Pokfulam and the Lady Ho Tung Welfare Centre in Sheung Shui. Furthermore, the Hong Kong government announced in 2016 to introduce a built heritage fund of HK$500 million fund to finance the RHBTPS and for privately-owned graded historic buildings under the Financial Assistance for Maintenance Scheme.
In the 2016-2017 Budget, the government reiterated its commitment to infrastructure investment. Major projects currently underway include the Kai Tak Development (KTD), the Hong Kong-Zhuhai-Macau Main Bridge, the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, the West Kowloon Cultural District and the expansion of road and railway networks. In addition, to increase the land supply for commercial and residential uses, the government is planning new development areas, including the Hong Kong-Zhuhai-Macau Bridge Hong Kong Boundary Crossing Facilities (HKBCF) and the airport's North Commercial District, as part of the plan to develop the Lantau Island with retail, tourism facilities and supporting infrastructure.
Urbanisation in China drives up demand for architectural services
In the 2014-20 urbanisation plan announced in March 2014, the Chinese government aims to increase the urbanisation rate from 53.7% in 2013 to 60% by 2020, with approximately 100 million people expected to move from the rural areas into cities. To accommodate the rural-urban migration, massive infrastructure development will continue in the coming years. In addition, the continuous development of small- and medium-sized cities in China will strengthen the economic hinterland of larger cities. The broader urbanization will further spur demand for housing, hotels and office buildings in both larger cities and their satellite cities. It is expected that such infrastructure expansion, which covers housing, rural infrastructure and transport infrastructure, will bring enormous opportunities to Hong Kong architectural firms.
Hong Kong architectural firms in the Mainland market
Hong Kong architectural firms started entering the Chinese mainland market in the late 1970s. Hong Kong architects, who excel at projects requiring advanced technical requirements and complexity, have been involved in designing landmark buildings and multi-purpose complexes in major cities. They have also drawn up the blueprints for upmarket residential developments as well as “green” buildings in smaller cities.
The common practice of Hong Kong architectural firms entering the mainland market is to cooperate with local design institutes. The mainland design institutes assist the Hong Kong partners in understanding and complying with the planning and building approval processes. On the other hand, Hong Kong architects provide input on advanced building design and technology. Hong Kong architects also have expertise in contract management and preparing tender documentations in accordance to international practices.
There were 369 Hong Kong, Macau, or Taiwan-funded construction service enterprises operating on the Chinese mainland as at the end of 2014 (with 154,400 employees), of which 78 were wholly owned. In addition, there were another 261 foreign-invested construction enterprises operating on the mainland (with 86,300 employees), and 81 of them were wholly owned.
To provide architectural, engineering, urban planning and landscape architectural services on the mainland, Hong Kong companies are allowed to set up joint-venture or wholly owned operations. In this regard, Hong Kong funded companies have to comply with the capital and other requirements (for details please see CEPA section below).
Green Building Boom
Ongoing awareness of environmental protection leads to an increasing demand for green buildings in Hong Kong. For example, the Buildings Energy Efficiency Ordinance enacted in 2010 specifies the energy efficiency design standards for four types of building services installations, and requires certain buildings to conduct energy audits. With the new legislation taking full effect since 2012, there will be more business opportunities for related professional services.
On the other hand, the Hong Kong Green Building Council launched Building Environmental Assessment Method Professional (BEAM Pro) programme in 2010 to provide industry professionals trainings on green building. As at August 2016, more than 1,400 practitioners were accredited as BEAM Professionals and about 270 of them were from the architecture sector.
Apart from Hong Kong, the Chinese mainland and other emerging countries are also going green. In 2013, the Chinese government issued the Action Plan for Green Buildings, aiming to promote sustainable development in the country’s urbanisation process. The Plan’s main objectives included enforcing mandatory energy saving standard on new buildings in urban areas and constructing green buildings of one billion sqm by end-2015, with 20% of the new buildings in urban areas to meet the green standard. In the UAE, the Masdar City in Abu Dhabi aims to be a carbon-free city, relying on renewable energy sources. Siemens established its new Middle East headquarters at Masdar City, the new office is built with eco-friendly materials and energy efficient technologies. In 2016, six major projects, including a 280-hectare industrial city with residential, commercial and industrial components and a 100-hectare golf complex, were approved by the Dubai authorities to help make a green and sustainable city by 2021.
The Belt and Road Opportunities
In March 2015, China’s National Development and Reform Commission issued The Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road, outlining the framework of the “Belt and Road” Initiative (BRI), co-operation priorities and mechanisms. In the 2016 Policy Address, the Chief Executive noted that Hong Kong should play an active role to facilitate the implementation of the BRI, leveraging the city’s strengths in providing professional services in a wide range of disciplines including architecture and engineering management. These Hong Kong professionals boast the requisite competence and experience to lead consultancies, construction projects, operations and management of the many infrastructural projects under the BRI.
The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)
Under CEPA, construction professional services comprise architectural services, engineering services, integrated engineering services, urban planning and landscape design services (except overall urban planning services).
As early as 2004, the Hong Kong Institute of Architects (HKIA) reached an agreement with the National Administration Board of Architectural Registration on mutual recognition of qualification by examination. According to the Agreement, Hong Kong's architects with a minimum of 5-year experience can obtain the mainland's Class I registered architect qualification after attending a 14-hour training session, and passing a test and an interview. Since the first examination for Hong Kong architect in Shenzhen in 2004, 412 Hong Kong architects attained the qualification between 2004 and 2008. Of these 412 architects, 249 of them also passed the Guangdong Legislation Examination from 2011 to 2013, As of October 2014, 39 Hong Kong architects and two Hong Kong architectural firms had registered in Guangdong.
In December 2014, the Agreement between the Chinese mainland and Hong Kong on Achieving Basic Liberalisation of Trade in Services in Guangdong (i.e. the Guangdong Agreement) was signed for implementation from March 2015. Under the Agreement, HKSS were granted national treatment to provide various construction and related engineering services, including general construction work for buildings, installation and assembly work, building completion and finishing work services in Guangdong. On the basis of the Guangdong Agreement, the Agreement on Trade in Services (“ATIS”) was signed in November 2015, extending the geographical coverage to the whole mainland for basic liberalisation of trade in services from June 2016. Unlike the previous Supplements which adopted a positive-list approach to introducing liberalisation measures, the two latest CEPA agreements adopt a hybrid approach to granting preferential access to Hong Kong using both positive and negative lists. Further information on the latest CEPA agreements can be found here.
As at 31 August 2016, there were 104 approved HKSS in the sector of construction professional services and construction and related engineering services.
 The latest Trade in Services Statistics for the year ending December 2014 was released in February 2016.