Business Insights | Review of Hung Shui Kiu Industry Park Company and Modern Logistics Cluster Study

Accelerating development of industries in Northern Metropolis

DEVB announced on 29 December 2025 that it has set up a non statutory, government owned Park Company to plan, develop and operate a ~23 hectare industry park at HSK/HT NDA; target mid 2026 operation start, with nil premium land grant (50 year) at the park level, initial capital injection, and a PPP friendly mandate (can develop, tender land, or form JVs). 8 ha is “spade ready” now; ~15 ha expected to be formed by end 2027. It is a clear signal that Hong Kong wants a more investor‑facing, execution‑oriented vehicle to land industries in the Northern Metropolis.

The move follows the Government’s shift towards industry driven development in the Northern Metropolis and its experience with paused/cancelled tenders for Multi-storey Buildings for Modern Industries (MSBs) sites (one in HSK/HT and another in Yuen Long) during 2025/2026. 

The Park Company’s role may overlap with existing Hong Kong Science and Technology Parks Corporation (HKSTP) functions (planning, building, leasing, and ecosystem building) who is managing InnoParks, risking governance duplication and stakeholder confusion unless roles are clearly delineated.

Balancing Long‑Term Ambition with Near‑Term Market Reality

Transport and Logistics Bureau published a study report on the Hung Shui Kiu / Ha Tsuen New Development Area (HSK/HT NDA or the Area) Modern Logistics Cluster on 16 January 2026 (the Study).

The Study presents a clear and forward‑looking vision for reinforcing Hong Kong’s role as a regional logistics and supply‑chain hub. It sets out a strategic blueprint to develop HSK/HT NDA as Hong Kong’s pilot modern logistics cluster, supporting the city’s long‑term positioning as a regional and international logistics and supply‑chain hub. It identifies the need to address Hong Kong’s structural shortage of logistics land, rising operational costs, ageing facilities, and increasing competition from regional peers, while aligning logistics development with the Northern Metropolis strategy and national policy objectives.

Key themes include the emphasis on an enterprise‑oriented and market‑enabling development model, the introduction of smart, automated and green logistics facilities, and the ambition to attract high‑value goods, e‑commerce, freight forwarding and emerging logistics activities to a total 36‑hectare logistics cluster developed in phases. The Study also highlights the importance of flexible development modes, differentiated functional zoning, and innovative land‑use approaches, alongside closer integration with Hong Kong’s multimodal transport network and the Greater Bay Area logistics ecosystem.

We welcome the Study’s strategic intent, particularly its recognition of evolving logistics trends, the importance of technology, automation and green logistics, and the need to address structural constraints that have long challenged the sector.

Importantly, the Study reflects a broad spectrum of industry feedback, capturing concerns raised by operators, developers, occupiers and investors on land supply, infrastructure readiness, cost pressures and operational efficiency. This consultative approach is a positive step and underscores the Government’s commitment to evidence‑based planning.

1.  Logistics land supply must be phased and demand led. With the Northern Metropolis planning for logistics GFA equivalent to around 1.5 times existing stock, careful pacing is essential to avoid supply outstripping absorption. Aligning land release, plot ratios and development intensity with proven take up—rather than long term projections alone—will be critical to maintaining market stability.
   
   
2. Demand creation requires clearer articulation and stronger incentives. While automation, smart logistics and green facilities are valid long term goals, current occupier demand remains selective. Targeted measures to attract anchor tenants, such as fiscal incentives, partnership models or pilot schemes, will be necessary to translate strategic aspirations into committed occupancy.
   
   
3. A transitional development model should be adopted. A “pay what you build” land disposal approach, offering initial flexibility in plot ratios and allowing lower rise, high efficiency facilities upfront, would better match near term demand while preserving the ability to intensify through future GFA uplift once market conditions are more certain.
   
   
4. Location strategy should be differentiated by logistics segment. Evidence to date suggests that high-value and automotive logistics continue to gravitate toward established airport and port centric locations. Expecting all segments to perform equally well in HSK/HT may introduce unnecessary risk without anchor occupiers or clear operational advantages.
   
   
5. Tender design must evolve alongside land policy. Moving away from a “highest bidder wins” model toward a combined technical and pricing assessment is a positive step. This should be complemented by more efficient pre-tender engagement, reduced reliance on EOIs, and the introduction of rolling tenders assessed on absolute criteria to improve transparency, reduce speculation and sustain market confidence.