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Building and Construction Industry in Hong Kong


  • Hong Kong companies have earned a reputation over the years in rapid construction of quality high-rise apartment blocks and office towers. The adoption of specialised construction techniques, such as reclamation and design-and-build methods, has made Hong Kong a regional leader.
  • Hong Kong’s construction industry performed well in 2013, with the gross value of construction work performed by main contractors increasing by 9% to HK$175.9 billion (US$22.7 billion).
  • Most of the export markets for Hong Kong’s building and construction services are in Asia, with the Chinese mainland being a major one. Major services exports include project management, contracting and engineering consulting.
  • The ten mega infrastructure projects announced in 2007 are being rolled out in phases as scheduled, boosting Hong Kong’s construction market.
  • China’s 12th Five-Year-Plan, released in March 2011, outlines the country’s intention of further increasing infrastructure investment, thereby offering more business opportunities for Hong Kong contractors.

Industry Data

Table: Industry data

Table: Major indicators of the building and civil engineering industries

Range of Services

Construction activities can broadly be classified into three categories, namely buildings (residential, commercial, and industrial/storage/service), structures and facilities (transport, other utilities and plant, environment, and sports and recreation), and non-site activities (decoration, maintenance and repair, etc.).

The overall gross value of construction work performed by main contractors in Hong Kong has been rising since 2009. A strong growth of 13.5% in the value of public sector sites drove up the construction activity by 9% to HK$175.9 billion in 2013.

The recent rise in public expenditure on infrastructure has been driven mainly by transportation projects, including the Hong Kong-Zhuhai-Macau Bridge, Guangzhou-Shenzhen-Hong Kong Express Rail Link, the expansion of railway networks such as the West Island Line and the Shatin to Central Link, as well as new highways such as Tuen Mun-Chek Lap Kok Link and Island Eastern Corridor Link. To expand land supply and enhance infrastructure, the government is planning for new town extensions and new development areas, such as North East New Territories New Development Areas, Hung Shui Kiu New Development Area, Tung Chung New Town Development Extension and the airport's North Commercial District. These works include land formation, road construction and laying of water mains. As the infrastructure projects are being rolled out, the demand for construction services in Hong Kong, particularly demand from the public sector, will remain high.

Table: Gross value of construction works performed by main contractors

Services Providers

Hong Kong's construction industry is characterised by a small number of large local contractors, a high level of subcontracting, presence of a large number of overseas contractors, with a substantial proportion of companies being both developers and contractors.

Most of Hong Kong's construction companies are small in size and those with less than HK$10 million (US$1.3 million) in annual gross value of construction work account for as high as 96% of the construction industry. The majority of the small ones act as subcontractors to the large companies, which tend to be main contractors. There are quite a number of big construction companies capable of handling projects requiring sophisticated technology and strong financial background and are expanding their business across the region.

Hong Kong contractors are experienced and highly skilled in building works. Because of the growing size and complexity of the projects, the current industry trend is to award large and complex building contracts as a single package to multi-disciplinary contractors. There is no formal restriction for entry to the contracting business in Hong Kong. Foreign and local contractors are treated alike, and they are allowed to tender local public sector projects.


Hong Kong's expertise in construction of quality high-rise residential and commercial buildings is internationally renowned and in great demand in overseas markets, especially in Asia. The Middle East has arisen to be a market with growing potential for Hong Kong’s construction companies. Government infrastructure plans as well as commercial projects provide good support to construction activities in the Gulf region. For example, the Hong Kong-based construction company, Chun Wo Development, launched a luxury residential project ‘Reem Diamond Residence’ in Abu Dhabi, the United Arab Emirates (UAE) in January 2014.

Major types of Hong Kong's exported services include project management, contracting and engineering consulting.

Table: Hong Kong Exports of Construction Services

Industry Development and Market Outlook

New momentum in public infrastructure

To achieve the objective of promoting economic growth through infrastructural development, the Hong Kong government has been increasing its infrastructure investment over the past few years. Some of the mega infrastructure projects announced in the Policy Address in October 2007 have had their details published and tenders released, thereby driving up local construction activities. Below is a summary of the ten infrastructure projects:

ProjectDescriptionEstimated cost
(US$ mln)
CommencementTarget completion
1.South Island Line(SIL)
  • Linking Admiralty to the Southern District on Hong Kong Island
2.The Shatin to Central Link (SCL)
  • Connecting the northeast New Territories and Hong Kong Island
3.The Tuen Mun Western Bypass and Tuen Mun Chek Lap Kok Link
  • Linking up Deep Bay in Shenzhen, the northwest New Territories and Hong Kong International Airport.
4.The Guangzhou- Shenzhen-Hong Kong Express Rail Link (Hong Kong Section)
  •  Linking up the national rail network of the Chinese mainland
  • Connecting West Kowloon to Shenzhen, Guangzhou
5.Hong Kong-Zhuhai-Macau Bridge
  • 29.6 km-Bridge with 6 lanes
  • Linking up Hong Kong, Zhuhai and Macau.
 2,740 2010 2016
6.Hong Kong-Shenzhen Airport Cooperation
  • A dedicated rail link between Shenzhen Airport and Hong Kong International Airport
7.Hong Kong- Shenzhen Joint Development of the Lok Ma Chau Loop
  • Lok Ma Chau Loop, an area near the Hong Kong-Shenzhen border
  • Working with Shenzhen authorities to develop the area
(Environmental Impact Assessment Report completed in 2013)
8.West Kowloon Cultural District (WKCD)
  • The flagship art and culture development in Hong Kong with aims to provide a platform to enhance arts education and cultural exchange and cooperation.
 Over 6,000 20132015
(first phase)
9.Kai Tak Development
  • An area consisting of former Hong Kong airport and its adjoining parts
  • To be developed into an area for commercial, residential, recreational, tourism and community uses together with supporting infrastructure
 Over 16,700 20092013 / 2016 / 2021 (In 3 phases)
10.New  Development Areas (NDAs)
  • In the Northern New Territories
  • Purposes of land use include housing, commercial, recreation and cultural facilities
(Environmental Impact Assessment Report approved in 2013)
(first phase)

Source: various press and government sources


Apart from the ten infrastructure projects, the Hong Kong government has also forged ahead with other works, such as Operation Building Bright and Revitalising Historic Building. In addition, further development of the Hong Kong International Airport, including the construction of the third runway, has been approved. 

In the 2014-15 Budget, the Hong Kong government projected public expenditure on capital works to reach HK$70.8 billion for the fiscal year ending March 2015. In recent years, public spending on infrastructure has been maintained at high levels. For instance, the government has invested in large-scale road and railway projects totalling over HK$90 billion since 2009.  

Infrastructure projects and property developments in the region

To accommodate the urbanisation process, many Asian countries are upgrading their basic infrastructure such as road networks, port facilities and housing. Commercial, retail and residential projects are springing up in many developing Asian countries, typically India, Indonesia, the Philippines, Thailand, Malaysia and Vietnam, where Hong Kong construction companies are actively seeking opportunities. For examples, Luks Group engages in cement production and property development in Vietnam, while Hongkong Land has participated in residential and office building projects in Indonesia, as well as luxury residential developments in the Philippines. 

The Middle East is another market which has attracted many Hong Kong companies, with many projects won in many Middle East countries. Hip Hing Construction has won contracts in Abu Dhabi’s carbon-free city Masdar, as well as in Dubai to build a 72-storey residential building through joint venture with a local contractor. Paul Y was awarded a contract worth US$77 million to build the 54-storey Arraya Office Tower in Kuwait.

China's construction market

Rapid urbanisation has driven up China’s infrastructure development. To expand domestic consumption, China’s urbanisation plan 2014-20 aims to increase the proportion of urban population from 53.7% in 2013 to 60% by 2020. The higher rate of urbanisation will generate huge demand for public infrastructure, housing and transport networks.

Table: Urbanisation indicator
Table: Urbanisation indicator

In the 12th Five-Year-Plan (FYP), the Chinese government announced ambitious plans to develop transport and energy infrastructure as part of the efforts to accelerate the country's industrial transformation and upgrading. The proposed projects include new railway lines, highways and airports.

Table: Transportation construction plans under the 12th FYP

The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)

Under CEPA, construction professional services include construction design services, engineering services, integrated engineering services, urban planning and landscape design services (except overall urban planning services).

According to the Regulations on Administration of Foreign-Invested Construction Enterprises promulgated in end-2002, the application for and approval of the establishment of foreign-invested construction enterprises has been further relaxed. However, CEPA still enjoys a number of preferential treatments compared with China’s WTO commitments.

In applying as a wholly-owned construction and engineering design enterprise, foreign service providers who have been qualified as certified architects or certified engineers in China shall not be fewer than 1/4 of the total certified professionals required under the qualification grading criteria (1/8 for a joint-venture (JV) construction and engineering design enterprise), and the foreign service providers who have the relevant design experience shall not be fewer than 1/4 of the total key technical personnel required under the qualification grading criteria (1/8 for a joint-venture construction and engineering design enterprise). Under CEPA, Hong Kong Service Suppliers (HKSS) can employ mainland registered professionals to fulfil the requirements.

In addition, for a foreign enterprise applying for a JV enterprise, the proportion of total capital contributed by mainland partners of JVs should be no less than 1/4 of the registered capital, whereas mainland partners of HKSS are not subject to the required proportion of the registered capital.

Under Supplement VII to CEPA, Hong Kong professionals who have obtained the mainland's Class-1 registered architect qualification or Class-1 registered structural engineer qualification, can act as partners to set up construction and engineering design offices on the mainland in accordance with the relevant qualification requirements, without restrictions on the ratio of the number of Hong Kong partners to the number of the Mainland partners, the ratio of the total capital contributed by the Hong Kong partners to that by the Mainland partners, or the Hong Kong partners' period of residence on the Mainland. Hong Kong professionals who have obtained Mainland's Class-1 registered architect qualification or Class-1 registered structural engineer qualification by mutual recognition, can register and practise in Guangdong.

Supplement VIII to CEPA provides Hong Kong professionals with national treatment in Guangdong, as they are allowed to register and practise in Guangdong on the same basis as their mainland counterparts with the same professional qualifications from April 2012. In addition, they are recognised as registered practitioners for the purpose of declaration of engineering design enterprise qualifications within Guangdong.

Under Supplement IX to CEPA, Hong Kong professionals with the mainland's supervision engineer qualification, registered architect, registered structural engineer, registered civil engineer (harbour and waterway), registered public facility engineer, registered chemical engineer or registered electrical engineer qualification, are allowed to register and practise in Guangdong regardless of whether they are registered practitioners in Hong Kong. They are recognised as registered practitioners for the purpose of declaration of supervision enterprise or engineering design enterprise qualifications within Guangdong, in accordance with the relevant Mainland regulations.

Supplement X to CEPA allows contractual service providers employed by HKSS to provide construction and related engineering services on the mainland, in the mode of movement of natural persons.

As of 30 April 2014, there were 102 approved HKSS in the sector of construction professional services, and construction and related engineering services.

Content provided by Picture: Jacqueline Yuen
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