LCQ8: Operation and future development of PMQ
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Question:
Since commencing operation in 2014 as a non-profit-making social enterprise, PMQ has shouldered the dual functions of promoting the conservation of historic buildings and the development of cultural and creative industries. However, some tenants have reflected that the low visitor flow at PMQ in recent years has resulted in relatively high unit turnover and vacancy rates. As the operation contract, which has a maximum term of 15 years, is due to expire in 2029, the community has expressed concerns about its operational effectiveness and long-term development upon contract expiry, as well as the need to better align with the positioning of Hong Kong as an East-meets-West centre for international cultural exchange as set out in the National 15th Five-Year Plan, and the objective of increasing the value added of the arts, culture and creative industries put forward in the First Five-Year Plan for Economic and Social Development of the Hong Kong Special Administrative Region (2026-2030). In this connection, will the Government inform this Council:
(1) of the financial and operational situation of PMQ in the past five years, including (i) the average occupancy rate and tenancy termination rate each year; (ii) the mix of tenants in the site and the proportion of the floor area actually put to use (e.g. the proportion of design and creative industries, food and beverage, retail and other categories); (iii) the total attendance each year; and (iv) the estimated proportion of local and non-local visitors (set out in tabular form);
(2) whether the authorities have introduced specific measures and incentives to assist and facilitate the operator of PMQ in attracting more competitive tenants and local original brands with potential to move in, so as to raise the occupancy rate and the overall operational effectiveness of the site; if so, of the details; if not, the reasons for that;
(3) as there are views that although PMQ operates on a self-financing basis in principle, quite a number of tenants have concurrently received government subsidies through various means (e.g. the CreateSmart Initiative); whether the authorities or the operator have collected relevant data or evaluated such situations; if so, of the relevant information for the past five years; if not, whether the authorities will expeditiously commence the relevant work;
(4) whether the authorities or the operator have actively promoted collaboration between PMQ and other historical and cultural tourism landmarks in the vicinity (e.g. Tai Kwun and the Central Market), so as to better leverage the synergy between historic buildings and cultural and creative industries, thereby enhancing the visitor flow and attractiveness of PMQ; and
(5) whether the authorities will, prior to the expiry of the operation contract, conduct a comprehensive review of PMQ's previous operational experience, tenancy terms, as well as its future development and positioning, etc, and make proper planning for the transitional arrangements for the tenants; if so, of the relevant timetable; if not, the reasons for that?
Reply:
President,
Situated at Aberdeen Street, Central, PMQ is the Former Police Married Quarters on Hollywood Road. PMQ is a project combining heritage conservation and supporting the creative industries. In March 2010, the Development Bureau (DEVB) and the Commerce and Economic Development Bureau publicly invited interested non-profit-making organisations to submit proposals. In November 2010, the proposal submitted by the Musketeers Education and Culture Charitable Foundation Limited (Musketeers Foundation) in collaboration with the Hong Kong Design Centre, the Hong Kong Polytechnic University, and the Hong Kong Design Institute under the Vocational Training Council, was selected. For this purpose, the Musketeers Foundation established PMQ Management Company Limited (Management Company), which has the charitable status under section 88 of the Inland Revenue Ordinance (Cap. 112) to operate on a non-profit self-financing basis, bearing the responsibility for the management, operation and maintenance of the PMQ site and premises, as well as tenancy matters and use of venue in relation to the studios, food and beverages facilities, and for the design and creative industries and toys and STEM (Science, Technology, Engineering and Mathematics) education.
The DEVB and the Culture, Sports and Tourism Bureau (CSTB) are the Government bureaux responsible for monitoring PMQ. The DEVB represents the Government as the landlord, while the CSTB handles matters relating to the policy area of the design and creative industries. The Management Company is required to submit annual reports and financial reports to the Government for reviewing the operation of PMQ.
In consultation with the DEVB, my reply to the questions raised by the Hon Kenneth Fok is as follows:
(1) According to the information provided by the Management Company, the average occupancy rates and the tenant mix and the respective proportions of actual floor area used at PMQ in the past five years are set out in the table below:
| Financial Year | Average Occupancy rate (per cent) |
Design and Creative Industries (per cent) | Food and Beverage (per cent) |
Toys and STEM Education (per cent) |
| 2021/22 | 87.7 | 90 | 10 | – |
| 2022/23 | 88 | 91 | 9 | – |
| 2023/24 | 83 | 88 | 10 | 2 |
| 2024/25 | 96 | 84 | 10 | 6 |
| 2025/26 | 98 | 85 | 9 | 6 |
According to the information provided by the Management Company, the total numbers of visitors and the estimated proportions of local and non-local visitors to PMQ in the past five years are set out in the table below:
| Financial Year | Total Number of Visitors | Local Visitors (per cent) | Non-local Visitors (per cent) |
| 2021/22 | 2 004 816 | 99 | 1 |
| 2022/23 | 1 894 650 | 99 | 1 |
| 2023/24 | 1 996 074 | 75 | 25 |
| 2024/25 | 2 286 824 | 70 | 30 |
| 2025/26 | 2 445 998 | 60 | 40 |
(2) The Management Company has been operating and managing PMQ on a self-financing basis. It organises various types of creative and other public-facing activities to drive visitor footfall and attract prospective tenants. These include the deTour, a design festival co-curated by designers and artists, held since 2014; the PMQ Seed, which cultivates design thinking among young people; the PMQ Coffee Agenda, a coffee lifestyle market; festive celebrations; heritage guided tours; and open days. Furthermore, on tenant selection, PMQ considers a host of factors, including the applicants' design standard and creative content, commercial viability, and willingness to participate in and contribute to the PMQ community (including organising activities, opening its studio to the public), in bringing in tenants that are commercially appealing and able to drive visitor traffic.
(3) The primary source of income of PMQ comes from the donation from the Musketeers Foundation and the rental income to support the daily operation. PMQ has also applied to the CreateSmart Initiative under the Cultural and Creative Industries Development Agency of the CSTB for funding for projects promoting the development of local creative industries (including deTour and the PMQ Seed as mentioned in (2)). In the past five years (2021/22 to 2025/26), a total of 21 projects lodged by PMQ were approved, amount to a total funding of about $150 million.
(4) The Government is committed to promoting the integration of PMQ with the Former Central Police Station Compound (i.e. Tai Kwun), the Central Market and nearby attractions, to maximise their synergy. The Antiquities and Monuments Office (AMO) has established the Central and Western District Heritage Trail, which covers the aforementioned historical buildings. The AMO regularly organises free guided tours for visitors to explore the heritage landmarks along the route and understand the district's development and evolution. In addition to the AMO, the Commissioner for Heritage's Office of the DEVB and the Urban Renewal Authority also organise activities from time to time to promote the historical buildings and heritage resources of Central and Western District, including PMQ and distinctive landmarks nearby. In terms of promotion and marketing, the Hong Kong Tourism Board has integrated PMQ and its surrounding landmarks into the four themed in-depth experiential routes of "Old Town Central", inviting the public and tourists to stroll through and explore the districts' unique historical and cultural heritage. This further deepens the synergy between attractions within the area, expanding the economic and tourism benefits of the cultural and creative industries.
(5) The new tenancy agreement of PMQ will expire by the end of 2028. The Government will in due course conduct a review of matters such as the operational performance, financial sustainability, key performance indicators of PMQ, for consideration of its future development and positioning.
Ends/Wednesday, November 4, 2026
Issued at HKT 14:35
Issued at HKT 14:35
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