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(Last updated: 6 Jan 2012)
Trends and opportunities
The market
Hong Kong is a dynamic commercial and financial centre with a slow growing population, currently at around seven million. The building, construction and civil engineering sector is large and competitive. Approximately half of the population live in subsidised public housing and the Hong Kong public continuously rate housing as a priority which is predominantly high rise apartment blocks with very few standalone houses. Both the public and private sectors carry out housing works.
Hong Kong is a regional leader in the building and construction sector, particularly known for its ability to rapidly construct high rise apartments. This capacity is predominantly attributed to specialised construction techniques, such as reclamation and design-and-build methods. Its export market is generally Asia, principally mainland China.
Variety of building and construction services
This sector is defined by three categories of construction activities:
- Building (residential, commercial and industrial/storage services)
- Structure and facilities (transport, other utilities and plant, environment and sports and recreation)
- Non-site activities (decoration, maintenance and repair)
Service providers
The industry is dominated by a small number of domestic contractors that are large in size. However there is also a diverse mix of foreign contractors, a considerable amount of companies that are involved in both subcontracting and developing, in addition to high numbers of subcontractors.
There are a substantial number of large companies that that are able to meet the needs of complex projects that require sophisticated technology and strong financial backing. These companies are usually in their internationalisation process, expanding across regional markets. These large companies are often the main contractors, who then in turn subcontract to smaller companies.
The industry involves many professional service providers such as architects, surveyors and engineers that are experienced and highly skilled in building works. This is in order to meet the nature of the construction projects in demand. Due to the complexity and size of these projects, they tend to be awarded as a single package to multi-disciplinary contractors.
It is a non-discriminative industry environment between local and foreign contactors and there are no formal restrictions to entry in both the private and public sector. However, in order to tender to the public sector foreign contractors must have a reputable track record and sufficient financial capability.
Opportunities
The Hong Kong Government announced the estimated capital work expenditure for 2011-12 will reach a record high of over HK$58 billion. The 10 major infrastructure projects are being rolled out in phases as scheduled. Among them, the Hong Kong-Zhuhai-Macau Bridge, the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Kai Tak Development Plan Stage 1 have commenced construction. The South Island Line (East) & Kwun Tong Line Extension commenced construction in 2011 and the Shatin to Central Link is expected to start in 2012.
Other major projects expected to start in 2011-12 include:
- Essential public infrastructure works for detailed design and ground investigation works for the Liantang/Heung Yuen Wai Boundary Control Point
- The replacement and rehabilitation of water mains in various districts across the territory
- Sewerage improvement works in Central and East Kowloon and the rural areas of the New Territories
- Redevelopment of Yan Chai Hospital
- Construction of district open space, sports centre and library in Area 74, Tseung Kwan O
With the 10 major infrastructure projects and other projects entering their construction peaks, the Hong Kong Government estimate that the capital works expenditure for each of the next few years will exceed HK$60 billion.
The 10 large-scale infrastructure projects are listed in this PDF (87KB).
New development areas
In February 2001, a Practice Note entitled 'Green and Innovative Building' was issued, which outlined government incentives for environment-friendly buildings. The development of intelligent buildings provides opportunities for Hong Kong’s builders to utilise advanced technologies in construction.
The best opportunities exist in the supply of building materials and equipment, and providing specialised construction and building services. Areas where Australia has particular capability and suitability for the Hong Kong building and construction sector are listed below.
Building and construction services:
- Architectural services
- Landscape architect
- Contractors
- Civil engineering
Building materials and products:
- Building and formwork systems
- Medium density fibreboard
- Paints and coating
- Fire protection products
- Steel and aluminium products
- Intelligent building systems
- Plasterboard and insulated panels
- High-end sanitary ware
- Up market kitchen cabinets
- Interior fit out products
- Good quality ceramic sinks and baths
- Electrical installation equipment and accessories
- Lighting equipment and installation
- Professional entertainment event and venue technology
- Marble, sandstone and limestone
Green building services:
- Architectural design services
- Environmental engineering services
- Indoor air quality assessment
- Building efficiency assessment
Green building products:
- Green building architectural design
- Environmental engineering services
- Indoor air quality assessment
- Building efficiency assessment
- Building materials with low VOC emissions
- Furnishings
- Renewable energy technologies
- Recycled building products
- Energy and water efficiency and management technologies
- Monitoring systems
- Energy-efficient heating, ventilation and air-conditioning
- Green roof and green wall technologies
- Renewable-energy lighting such as hybrid street lamp
- Structural fabrics with a high thermal performance, such as e-glass to reflect sunlight
Competitive environment
As an open market and because of Hong Kong's access to the Chinese market, competition in the building and construction sector is keen, but not forbidding. It is highly competitive with equipment and materials available from Europe, USA and Asia.
Similar time zones and its close geographic location enhance Australian companies' ability to supply products and services more easily and speedily than other overseas counterparts.
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