Hong Kong’s commercial developers must step up to charge up as city’s growing EV fleet leaves a shortfall in charging stations, CBRE says

Commercial premises will need to step up and cover a huge predicted deficit of EV charging stations, the property consultancy says in a report
Meanwhile the recycling and storage of EV batteries may spur demand for industrial and warehouse space

Hong Kong property

Cheryl Arcibal

Published: 2:41pm, 7 Feb, 2024

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Hong Kong is likely to face a severe shortage of electric vehicle (EV) charging facilities in the next 15 years or so, according to a study by CBRE. And with many residential buildings unfit to house their own chargers, commercial real estate in the city will need to step up and cover the deficit.

Given that electric cars are an essential component of Hong Kong’s efforts to be carbon-neutral by 2050, the property consultancy said an estimated shortage of about 100,000 charging points in 2035 and 170,000 by 2040 presents opportunities for shopping malls and office buildings to install chargers on their premises.

As of September, there were an estimated 40,000 EV facilities in the city – equivalent to 6 per cent of parking spaces, according to CBRE. Only a fifth of them are accessible to the public.

Major business clusters such as Central, Western and Yau Tsim Mong account for less than 10 per cent of public chargers, while Kowloon East has about 20 per cent, the most across the city.

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“The coming years will see commercial buildings with EV chargers become increasingly sought-after by occupiers and attract high visitor footfall,” said CBRE. “Office car parks are suitable for slow charging as white-collar workers leave their cars for the duration of the day. Shopping malls, on the other hand, are recommended to install both medium and fast chargers, balancing shoppers’ time management needs.

“Fast chargers are also likely to attract stronger demand near residential clusters, where users can charge their vehicles while grocery shopping,” according to the report.

Although the changes are unlikely to herald a big reset for the city’s property sector, providing EV chargers is one way to “future-proof buildings,” said Marcos Chan, head of research at CBRE Hong Kong.

There are plenty of reasons why the use of EVs is likely to surge in the city, CBRE said. Demand and supply, as well as regulations, support the case for this scenario.

With transport being the second-largest direct source of greenhouse gas emissions in Hong Kong in 2022, accounting for 19 per cent of the total, the government has announced that it will cease the new registration of fuel-powered private cars, including plug-in hybrid vehicles, by 2035.

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Meanwhile, the largest automobile companies in the world such as Porsche, Volvo, BMW, Hyundai, Kia and Toyota are all forecasting that from this year EV sales will account for a significant portion of their sales.

In the cases of GM and Lexus, all new car sales will be EVs by 2035, according to data compiled by CBRE.

Demand has kept up with burgeoning supply. In 2022, for example, EVs accounted for more than half of the city’s private car sales, the highest proportion in Asia and the third-highest in the world for that year, according to CBRE.

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“Despite being a small market, Hong Kong is home to many EVs, the number of which grew from 10,670 in 2018 to 70,409 in November 2023,” the report said.

The electric car industry is likely to usher in changes in the property sector that go beyond the need for chargers, CBRE said.

The city’s real estate will have to find ways to capitalise on the government’s push for Hong Kong as a location for EV technologies research and development. EV battery manufacturer CATL has agreed to establish an R&D hub and its international headquarters in Hong Kong.

Car battery manufacturers may also consider establishing value-add services in Hong Kong such as sales and marketing, boosting the need for office space.

The recycling and storage of EV batteries is also likely to spur demand for industrial and warehouse space, while car service centres may need to transform their premises to accommodate the needs of EV owners.

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