LCQ13: Provision of residential facilities by the Hong Kong Science and Technology Parks Corporation

Hong Kong (HKSAR) -      Following is a question by the Hon Jimmy Ng and a written reply by the Secretary for Innovation and Technology, Mr Nicholas W Yang, in the Legislative Council today (January 31):


     The Chief Executive of the last term announced in the Policy Address, which he delivered in January last year, that to further foster the development of the innovation and technology ecosystem in Hong Kong, the Government supported the construction by the Hong Kong Science and Technology Parks Corporation (HKSTPC) of an InnoCell adjacent to the Hong Kong Science Park (HKSP) to provide 500 residential units with flexible design and such facilities as shared working spaces for leasing to the persons-in-charge of the tenants/incubatees in the HKSP, as well as their overseas or Mainland employees and visiting scientists/researchers. In addition, the Government anticipates that the monthly rental of a furnished InnoCell unit in 2020 will be in the range of $8,000 to $10,000, which is about 60% of the market rent of the properties of similar quality in nearby areas. In this connection, will the Government inform this Council if it knows:

(1) given that while the InnoCell will provide 500 residential units upon commissioning in 2020, it has been projected in a relevant consultancy study that the demand for such residential units will be around 580 units in 2020-2021, representing a shortfall of 80 residential units, whether the HKSTPC has plans to provide more such residential facilities; if the HKSTPC does, of the details; if not, the reasons for that;

(2) as local employees do not meet the preliminary criteria proposed by the HKSTPC for admission to the InnoCell, whether the HKSTPC will consider providing residential facilities for local talents in the Park; if the HKSTPC will, of the details; if not, the reasons for that;

(3) as the findings of the study conducted by the consultant concerned have shown that the InnoCell is estimated to generate a direct value added of around $110 million, as well as an indirect and induced value added of $56 million per year (at 2014 prices), the methods and assumptions adopted by the consultant for computing such amounts; and

(4) the mechanism and criteria based on which the HKSTPC determines (i) the rental level at the time of launch of the InnoCell units and (ii) the rate of rental adjustment in future?



     The missions of the Hong Kong Science and Technology Parks Corporation (HKSTPC) are to develop suitable premises, manage and control the land and other facilities to support technology-based companies and related activities; to facilitate the research and development and application of technologies in the manufacturing and service industries in Hong Kong; and to support the development, transfer and use of new or advanced technologies in Hong Kong.  The InnoCell project is an important new infrastructure of the Hong Kong Science Park (HKSP) to help foster the development of the innovation and technology (I&T) ecosystem in Hong Kong.

     Our reply to the four parts of the question is as follows:

(1) During the early planning stage of the InnoCell, the HKSTPC commissioned a consultant to conduct a market survey, inquiring of Science Park tenants and stakeholders of the I&T industry about their demand for accommodation.

The survey revealed that there was a strong demand in affordable accommodation in the vicinity of the HKSP. Based on the findings of the survey, it was projected that the relevant demand would be around 580 units in 2020/21.

     Taking into account the size and the height restriction of the site for developing the InnoCell, the InnoCell can provide a maximum of 500 units. As these units have great flexibility and the rental periods range from short- to medium-term, it is considered that 500 units can cope with the demand.

The HKSTPC will continue reviewing the demand.
(2) The target tenants of the InnoCell are mainly principals of tenants/incubatees in the HKSP; Mainland/overseas employees of tenants/incubatees; and visiting scientists/researchers from the Mainland or overseas.

     Based on a preliminary estimate, tenants from the Mainland and overseas will account for about half of the total tenants in the InnoCell. Local I&T talents can also be admitted as tenants of the InnoCell if they fulfil the admission criteria and pass the score-based assessment.

     The aforesaid mix of tenant groups in the InnoCell is only a preliminary estimate. The HKSTPC will maintain close communication with the tenants and incubatees of the HKSP to understand their need and opinion, and adjust the mix of tenant groups, admission criteria and scoring system correspondingly as appropriate.

(3) The consultancy study's Direct Gross Value Added (GVA) is the result by multiplying the estimated direct employment by the "GVA per employee" for various industries published by the Census and Statistics Department.

The calculation is as follows: the InnoCell will create 200 new direct employments (Note 1), and the GVA per employee in the I&T industry in 2014 is approximately $470 000 annually; at the same time the InnoCell will create 100 supporting staff (Note 2), and the GVA per employee in the accommodation and food services sector in 2014 is approximately $255,000 annually. The sum of the two (200 × 470,000 + 100 × 255,000) is the direct GVA of $110 million per year.

     Indirect and induced value added refers to other related expenditures (for example, for purchasing goods and utilising transportation, professional, financial and other services) by tenants and visitors attracted to or retained at the HKSP due to the InnoCell.

     The consultant, with reference to the reasonable multiplier provided in the "Economic Benefits Analysis Study for Stage 1 of the Science Park Expansion Programme", estimated that the indirect value added is approximately 33% of the direct value added, while the induced value added is approximately 16% of the direct value added.

(4) Our objective is to set the rental level of the InnoCell at around 60% of the market rent of properties of similar quality in the nearby areas. When setting the rental of the InnoCell, the HKSTPC will make reference to the prevailing market situation, the rental level of properties of similar quality in the nearby areas as well as the affordability of the applicants and their companies, and will review the rental level according to changes in these factors from time to time.

We will take into account the income level and affordability of small and medium enterprises, start-ups and incubatees, and may charge them lower rental.

     At present, the monthly rental of a high quality flat nearby similar to that in the InnoCell with a saleable floor area of about 250 square feet (sq ft) is about $10,000 (Note 3), and is expected to reach about $12,000 on average by 2021 (excluding utilities and management fees). For a furnished unit in the InnoCell (including management fees, furniture, rates, water and electricity as well as fees for using common facilities), the monthly rental is expected to be set at about $8,000 to $10,000 on average in 2021.

     The InnoCell, apart from being furnished, will adopt "Smart Home" products developed in the HKSP as appropriate and will also provide other common facilities as well as shared working space to facilitate tenants' interaction and collaboration, thereby creating an atmosphere favourable to the development of I&T. These would make the facility a preferred choice for I&T talents.

In addition, the proposed rent is considered reasonable and competitive for premises with dual functions both as working space and short- to medium-term accommodation. Its proximity to the HKSP, the shared facilities available and synergy with the technology community are add-on and unique benefits.

Note 1: "Direct employment opportunities" refers to new tenants or employees that are attracted to the HKSP due to the development of the InnoCell. They may include new incubatees/overseas or Mainland employees/visitors of the existing tenants.

Note 2: Based on the ratio of 1 (units) : 0.2 (supporting staff), the consultant estimated that the InnoCell needs 100 supporting staff.

They can be classified into three categories: (1) Administrative staff (for example, managing staff, officers responsible for marketing and event organising, etc); (2) Technical staff (for example, electrical and mechanical engineers, repairing staff, etc); and (3) staff responsible for daily operation (for example, customer service, room attendants, security staff, etc). As the InnoCell will operate 24/7, the HKSTPC will need to arrange its manpower based on a roster system. Based on a preliminary estimation, among these 100 supporting staff, 20% to 30% of them are substitute staff.

The HKSTPC is studying carefully the operating mode of the InnoCell, including the details of manpower arrangement.

Note 3: At present, the rental level per sq ft (in saleable floor area) of an unfurnished residential unit in Tai Po and Sha Tin is $32 to $45 (excluding utilities and management fees). The average market rent of a unit of about 250 sq ft is about $10,000, i.e. (32+45)÷2×250.

Published on: 2018-01-31

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