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Following is a question by the Hon Wong Sing-chi and a reply by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, in the Legislative Council today (June 18):

Question:

It has been reported that the facilities and office premises of the Hong Kong Science Park Phase 1 have not yet been fully rented out. In this connection, will the Government inform this Council:

(a) of the total number of tenants with whom the Hong Kong Science and Technology Parks Corporation has signed tenancy agreements or letters of intent as at May this year; and whether these tenants have asked for surrender of tenancy or cancellation of tenancy agreements because of the recent epidemic in Hong Kong; if so, of the details;

(b) of the vacancy and occupancy rates, rental income and operating expenses of the facilities and office premises of the Science Park Phase 1 each month since becoming available for occupation; and whether concessions such as rent-free period or rent exemption have been offered to tenants by the Science Park with a view to improving its tenancy position; if so, of the details; if not, the reasons for that; and

(c) although the authorities were allocated funds in 2001 for the construction of the Science Park Phase 2 and will arrange for the construction of Phase 3 later, in view of the continued unsatisfactory tenancy position of Phase 1, whether the authorities will consider shelving the construction plans for Phases 2 and 3 in order to avoid wastage of resources; if so, of the details; if not, the reasons for that?

Reply:

Madam President,

(a) As at end of May this year, the Science Park managed by the Hong Kong Science and Technology Parks Corporation (HKSTPC) signed tenancy agreements or letters of intent with a total of 28 tenants for Phase 1 of the Science Park. It also approved to admit nine companies as incubatees. Up to end May this year, no tenant asked for surrender of tenancy or cancellation of tenancy agreement because of the impact brought by Atypical Pneumonia.

On the other hand, some individual overseas companies interested in setting up in the Science Park have postponed their study visits to the Science Park owing to the situation of Atypical Pneumonia. HKSTPC is now proactively following up with these companies.

(b) The facilities and office premises of the first two buildings of the Science Park Phase 1 were opened at end June 2002. The tenants have already been moving in one after another. At present, the occupancy rate of the two buildings is 85 per cent. Detailed information on the vacancy and occupancy rates, rental income and operating expenses each month since those two buildings becoming available for occupation are at Annex (pdf format).

The Science Park attracts companies to establish in the Park by providing a comprehensive infrastructure and a conducive environment, relevant value-added services such as business networking and information services, as well as enhancing the supporting facilities in the Science Park, e.g. the setting up of the integrated circuit design support centre, so as to turn the Science Park into a focal point for promotion of technological development. In order to improve the tenancy position, the HKSTPC has been proactive in promoting overseas, Mainland and local enterprises to establish, expand and consolidate their research and development businesses in the Science Park.

When discussing tenancy agreements with potential tenants, the HKSTPC will consider, on a case-by-case basis, whether it is appropriate to offer rent-free periods and if so, the length of such rent-free periods, in the light of factors such as tenancy period, tenancy area and market situation.

(c) Promoting technological development along the concept of clustering, the Science Park is a key infrastructure for supporting the innovation and technological development of Hong Kong. Tenants of Science Park should engage in technology-intensive business and their operations in the Science Park should be carried out through the development, enhancement or application of innovation and technology. As far as the aforementioned 37 companies approved for admission into the Science Park are concerned, Science Park is catalyzing the building up of clusters with synergistic effect and the emergence of technology-based enterprises, particularly in electronics, information technology and telecommunications sectors.

We consider that the tenancy position of the Science Park Phase 1 is fairly satisfactory. The Science Park should be of reasonable scale in order to attract technology-based companies and develop technology clusters for creating synergistic effect. Not proceeding with Phase 2 of the Science Park at this stage will risk adverse knock-on effect on Phase 1. Therefore, we have no intention to shelve the construction plan of Phase 2. In the course of developing Science Park Phase 2, the HKSTPC will divide the construction works into four modules, and the progress of the development can be adjusted in view of market situation and prevailing conditions.

As for the construction plan for Science Park Phase 3, we will give detailed consideration to the plan in due course in the light of the development of Phases 1 and 2 and market situation.

End/Wednesday, June 18, 2003

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