Speeches and Presentations



LCQ10: Operation of Cyberport

Following is a question by the Hon Christopher Chung and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Legislative Council meeting today (April 9):

Question:

In 2000, the Government entered, through three private and wholly-owned companies set up under the Financial Secretary Incorporated (FSI), into cooperation with a private developer in developing the Cyberport Project, which comprises a Cyberport Portion and an ancillary Residential Portion. It has been a decade since the Cyberport Portion, managed by the Hong Kong Cyberport Management Company Limited (HKCMCL), was completed and commissioned in 2004. Regarding the operation of Cyberport, will the Government inform this Council:

(1) of the respective numbers of existing Cyberport tenants engaged in (i) the information and communications technology (ICT) industry, and (ii) industries unrelated or indirectly related to that industry, and set out in Table 1 and Table 2 a breakdown by the type and nature of industry respectively;

Table 1
Type of industryNumber of tenants
Development, manufacture or design of computer hardware 
Development or design of computer software (other than games) 
Development or design of communications technology hardware 
Development or design of mobile applications (other than games) 
Development and design of game programs (computer or mobile phone) 
Total: 

Table 2
Nature of industry  Number of tenants
Total: 

(2) of the respective vacancy rates of Cyberport's offices and retail space in its arcade in the past three years;

(3) of the number of internationally renowned multinational ICT companies attracted to Cyberport, and the state-of-the-art technologies brought in for research and development in Cyberport, by HKCMCL in the past five years, as well as the details of such technologies;

(4) given that the vision of HKCMCL is to establish Cyberport as "a leading ICT hub in the Asia-Pacific region", whether the authorities have assessed if this vision has been achieved;

(5) given that some members of the public have pointed out that Cyberport and Hong Kong Science Park are both projects developed by the Government with the common objectives of promoting innovation and technological development in Hong Kong, incubating local technology start-ups and nurturing technology talents, and that quite a number of tenants in Science Park are also engaged in businesses concerning computer software and hardware and communications technology, whether the authorities have assessed if there is currently any overlap in scope of work, if there is a division of work between Cyberport and Science Park, and if resources have been wasted due to duplication of work; if there is a division of work, of the details; and

(6) given that, according to a document submitted by the Commerce and Economic Development Bureau to a panel of this Council in March this year, the operating revenue of FSI (excluding the project income from the residential development) was $407 million in 2012-2013, of the sources of this revenue; given that the authorities have stated in the document that the Cyberport Project is now entering the final stage and the Government is working closely with the project developer to wrap up the Project, of the relevant details; whether the completion of the Project will affect the future operation and development directions of Cyberport?

Reply:

President,

My reply to the six-part question is as follows -

(1) According to Cyberport's leasing policy, its offices are only leased to information and communications technology (ICT) companies or companies that are related to the ICT industry, such as those providing professional services on legal matters or intellectual property. Breakdown of Cyberport office tenants by nature of work as at February 28, 2014 is set out at the Annex.

(2) The vacancy rates of Cyberport offices and arcade as at March 31 of the past three years are set out below:
YearMarch 31, 2012March 31, 2013March 31, 2014
Offices' vacancy rate  14%14%9%
Arcade's vacancy rate8%5%3%

(3) Over the years, Cyberport has attracted a number of well-established ICT companies from around the world, including Microsoft, IBM, Cisco Systems, etc. At the same time, some well-established local ICT companies, including Pacific Century Cyber Works, Communication Services Limited, CITIC 21CN, etc. have also set up at Cyberport. In the past five years, 52 multi-national ICT companies have established business at Cyberport. These companies have introduced many state-of-the-art technologies to Hong Kong, including new smartphone operating systems and real-time 3D weather graphics system, taking Hong Kong's ICT development to the next level.

(4) Cyberport's vision is to establish itself as a leading ICT hub in the Asia-Pacific region through the creation of a cluster of ICT companies and professionals. To achieve this vision, Cyberport endeavours to nurture ICT talents, create business opportunities for the industry and drive widespread ICT adoption. Over the years, Cyberport has been working towards fulfilling these objectives and its efforts are coming to fruition. Its achievements are generally recognised by the industry.

Throughout the years, Cyberport has attracted many local and overseas ICT companies to establish their business there. As at February 28, 2014, 35% of Cyberport's tenants are non-local, and some of them are large-scale multi-national ICT companies. Moreover, Cyberport actively nurtures ICT talents through its incubation programme, which provides various kinds of support to help startups develop products and strengthen business operations, thereby enhancing their competitiveness in the commercial market. As at the end of February 2014, a total of 219 startups have joined Cyberport's incubation programme, many of which have become successful business undertakings and won investors' recognition. The investment funding they have attracted exceeds $100 million in total. Furthermore, they have won a total of 133 awards in various renowned local and international competitions. Many of them have also succeeded in gaining foothold in overseas markets.

In addition, Cyberport is proactive in leveraging on state-of-the-art technologies and cutting-edge technological tools to help the industry grasp market opportunities and provide an environment conducive to the development of the local technology industry. For example, Cyberport launched the Cyberport Community Cloud in 2013 to offer convenient, user-friendly and self-provisioning cloud services for its tenants and subscribers, so as to facilitate them to deploy scalable resources having regard to their actual demands, with a view to enhancing cost-effectiveness as well as expediting the research and development of applications and new products. In 2013, Cyberport also expanded the Digital Cinema Exchange (DCX) network and service (e.g. 2D-3D real-time conversion) to bring the latest technology of digital cinema to the local film industry, generating opportunities for cinema operators and enhancing the viewing experience of audiences. As at the end of February 2014, 136 digital screens, representing 70% of 193 digital screens in Hong Kong, have been connected to the DCX network with over 80 live events delivered. On driving ICT adoption, Cyberport has organised many major events with a view to facilitating exchanges with talents from around the world, promoting Hong Kong as a knowledge-based digital economy, and stimulating youngsters' interest in the ICT industry.

These achievements show that Cyberport is actively fulfilling its function as ICT flagship of Hong Kong, and has made significant contributions towards promoting the development of the local technology industry. Cyberport has dedicated $100 million in the past three years to its public mission programmes. In the next three years, Cyberport will enhance its public mission work and double the expenditure on public mission activities to $200 million.

(5) While the positioning and objectives of Cyberport and Science Park are clear and well-defined, they also co-operate with each other closely. Cyberport focuses on creating a cluster of ICT companies in Hong Kong, particularly those engaging in technology application including mobile applications, digital entertainment and cloud computing applications, etc. On the other hand, Science Park mainly attracts technology-intensive companies for conducting research and development so as to promote the development and adoption of technology in the local industrial sector. Science Park's tenants cover various technological areas, including biotechnology, precision engineering, green technology, electronics, information technology and telecommunications, etc. Cyberport and Science Park maintain close communication and liaison with a view to achieving synergy and complementing each other's strengths in various areas, thus generating more development opportunities for the industry.

(6) In 2012-13, the operating revenue (excluding the project income from the residential development) of the Cyberport Companies was $407 million, chiefly from rentals and management fees of the offices and arcade, profits from hotel operation, and income from providing IT facilities and services, etc.

In 2000, the Government entered into the Cyberport Project Agreement with the developer. Under the Project Agreement, the developer was responsible for the design, development, construction and marketing of the Cyberport Project. The Project comprises the Cyberport Portion (i.e. four office buildings, one hotel and one arcade) and the Residential Portion. The Cyberport Portion was completed and returned to the Government in 2004, while the Residential Portion was completed in 2008. All residential units were sold in 2013. As the developer had largely fulfilled all obligations under the Project Agreement, the Government has initiated discussion with the developer on project completion pursuant to the Project Agreement. Since the developer has no involvement in the operation of the Cyberport Portion, completion of the Project will not affect Cyberport's operation and development.

Wednesday, April 9, 2014

Issued at HKT 14:55

Annex PDF