Arthur Tsang, Tech Innovation Researcher, Our Hong Kong Foundation / Research and Content Committee Member, Hong Kong PropTech Association
10 March 2023
What’s new to innovation and technology
Before getting a deeper dive into how this year’s Budget invests in PropTech, let us get a general sense of what the Government offers for Hong Kong’s innovation and technology (I&T) development. Following the release of the Hong Kong I&T Development Blueprint, $6 billion (among the earlier earmarked $10 billion) was earmarked for a life technology mega research institute, and another $3 billion for AI and quantum technology, along with the establishment of a “Microelectronics Research and Development Institute”.
Entrepreneurship is another key focus of the Budget. The Hong Kong Science and Technology Parks will inject $400 million into its Corporate Venture Fund and another $110 million to launch a co-acceleration programme. Meanwhile, Cyberport will receive $265 million from the government to launch an incubation programme for smart living start‑ups.
GreenTech development brings about PropTech development
Apart from the key tech industries being put forth in the blueprint, the Budget specifically and unprecedently highlights the development of Web 3 and Green Technology. Previously, the government has had some initiatives on the adoption of green technology, mainly for sourcing new energy and its efficient use, and on research and development, with the $400 million Green Tech Fund as the most relevant one.
Coupling with the Government’s recent push for Hong Kong to become an international GreenFi centre through measures like the issuance of green bonds and grants, and HKEX’s development of a carbon marketplace, the Budget has clearly proposed to build Hong Kong into an international GreenTech centre through various measures steered by a newly established Green Technology and Finance Development Committee.
The use cases of GreenTech, are known to be transport and buildings, and the notion of PropTech comes in quite naturally. This is depicted by use cases like YdotX-CLP’s energy-saving chiller optimisation system. To achieve popularization of green buildings, there have been some initiatives brought forward by quasi-governmental organizations such as the establishment of the Hong Kong Green Building Council by the Construction Industry Council and other non-profits. The latest will be the Green PropTech Innovator Challenge by the Hong Kong Proptech Association and Y.X Community. With a governmental commitment to GreenTech, it is likely to Green PropTech will become the trend.
ConTech as the Budget’s key focus
For PropTech-specific policies, the government has mainly focused on (i) digitalization, including common spatial data infrastructure (CSDI) development and building information modelling (BIM) use, and (ii) off-site production particularly modular integrated construction (MIC). It is therefore unsurprising that this year’s Budget places great focus on ConTech and earmarked a total of $75 million as it falls under both two categories.
The Budget’s initiatives cover a wide span of ConTech elements: $30 million was earmarked for the Development Bureau to plan on establishing the “Building Testing and Research Institute” which explores innovative building materials, construction methods and technologies, and devises standards, conducts testing and provides accreditation especially to harmonize with the mainland and international regulations. Without doubt, BIM will be one of the technologies undertaken by this institute and the Budget clearly stretches the Government’s emphasis to other elements including inputs (materials) and output (testing and standards).
On the production side, another $30 million was earmarked for a plan on the construction of the first “advanced construction industry building” in Tsing Yi to allow operators to set up steel reinforcement bar prefabrication yards, processing sites for multi‑trade integrated mechanical, electrical and plumbing (MiMEP), and other advanced manufacturing yards. Besides, $15 million was earmarked to study on the optimization the supply chain of MIC modules in both Hong Kong and the Greater Bay Area. Thus, the Budget transcends the adoption of MIC to reindustrialization for MIC.
Certainly, there is much more to cover for PropTech development. Apart from Green PropTech and ConTech, smart buildings and the construction of digital twins are important topics to be explored, and are much more comprehensive than and far transcend the scatters governmental initiatives on CSDI and BIM. Digital transactions and experience depicted by use cases like Zhengliang-JLL’s commercial real estate valuation platform and Midland-Matterport’s VR Flat Shopping.
After all, the future is absolutely bright for PropTech development.