A late bloomer: life sciences in Hong Kong
Given that life sciences are on the ascent across the globe, how will Hong Kong adapt and get a slice of the cake?
Speaking of Qinshihuang (China’s first Emperor), what comes to your mind? The Terracotta Army, the Great Wall or the Emperor’s desperate yearning for eternal life? No matter what time period you live in, human beings always have a strong desire to live a healthy and long life. More recently, the COVID-19 global pandemic came as a wake-up call to all about the importance of health and the fragility of life.
Health issues have never been more pressing than now with population ageing and unknown viruses breeding due to global warming. According to Hong Kong’s Census & Statistics Department, people aged 65 years old or above accounts for 14.2% of the total population ten years ago. The share then increased to 21.8% in 2023 and will reach 29.1% by 2033, meaning that local demand for healthcare services and supplies is on a rising trend going forward.
In 2018, the government set out to pencil and roll out some strategic plans to promote the growth of the local life sciences industry, with the aspiration to be a leading biotechnology fundraising city globally. Leveraging on Hong Kong’s status as a financial hub and its exclusive connection to the mainland China’s capital market, Hong Kong Exchange and Clearing (HKEX) eased the listing regulations for biotech companies, allowing new economy-related firms with weighted voting rights structures and pre-revenue biotechnology companies to be listed in HKEX. Given the considerably long development cycle for medicinal products, the updated listing regime is beneficial to biotechnology companies, especially for those with products still in the R&D stage. The relaxation of the listing criteria is expected to attract behemoths to set foot in Hong Kong.
Furthermore, the government is providing monetary assistance to technology-related start-ups through the launch of the Innovation and Technology Fund. As of May 2023, 809 biotechnology projects received approval of their funding applications. On the facilities front, the proposed San Tin Technopole is poised to become the first business park to accommodate new economy-related corporations with the first batch of Hong Kong-Shenzhen Innovation & Technology Park earmarked for biotechnology firms. A total of eight premises will be completed in phases by 2024, including four wet laboratories, one residential building and three dry laboratories/offices. Upon full completion, San Tin Technopole is set to provide 75.3 million sq ft gross floor area for new economy corporations.
So what does this mean for the real estate sector? For all the provision of financial support and future pipeline of space for biotech firms, the supply of suitable space for life sciences remains extremely tight. The considerable time required for a full I&T hub may take ten years to develop, and this is where the private sector comes in – redeveloping industrial buildings into “laboratory buildings”.
Like many modern industrial buildings in Hong Kong, laboratory buildings can be divided into several workshop units with laboratory building specifications. The scalability of these workshops allows start-ups to flexibly decide on the size to be leased according to their requirement at an affordable rental level.
Breaking ground on life sciences will not be an easy feat, and participation of the private sector is necessary to accelerate the process. New vaccines developed by the life sciences sector helps bring an end to COVID-19 pandemic, this promising sector could pave a new path for the embattled Hong Kong economy.