Hong Kong Industry Profiles

Overview

• Hong Kong is the region's leader in the surveying profession in terms of experience and technical expertise. The buoyant construction market over the last two decades has provided invaluable exposure for the local surveying profession to a wide range of projects.
• In the past, many Hong Kong surveying firms partnered with international firms, mainly from the UK, to bid for large international projects. In recent years, key Hong Kong players are capable of providing services with international standards on their own. Many of them have set their sight on overseas markets, such as the Middle East countries.
• The number of surveyors practising in Hong Kong has been growing as a result of increasing opportunities in the domestic and surrounding markets.
• Three divisions of Hong Kong surveying industry have gained mutual recognition of professional qualification with the Chinese mainland, namely general practice, quantity surveying and building surveying.

Industry Data

Sources: Quarterly Report of Employment & Vacancies Statistics, Census and Statistics Department

Source: Hong Kong Institute of Surveyors

Range of Services

Services provided by the surveying profession can be classified into 4 major categories:

General practice surveyors are concerned with the measurement, management, development and valuation of land, property and building, with the negotiation of sales and lettings and with the financial aspects of investment in property. Services offered include:

• valuation: valuations for purchase, sale, letting and mortgage for all types of properties; statutory valuations relating to resumption, rent control, rating, stamp duty, estate duty, etc.; valuations of company portfolios etc.
• development consultancy: market studies and evaluation of development; negotiation with government on modification, surrender and re-grant of land leases; preparation of financial assessments, cash flow studies and expenditure control systems
• negotiating on behalf of clients for purchase, sale or lease of all types of lands and buildings
• property management: undertaking on behalf of owners, the management of all forms of property; advises on situations of refurbishment/renovation and redevelopment

Quantity surveyors are construction cost consultants. They possess expert knowledge of costs, values, labour and materials process, finance, contractual arrangements and legal matters in the construction field. Major employers of quantity surveyors are private developers, governments and related bodies, contractors, mining and petrochemical companies, and insurance companies. Principal services rendered are:

• preliminary cost advice
• cost planning
• advise on fair contract prices for tenders
• advise on the best kind of contract for the project
• valuation of construction and recommendation for certified payment
• preparing cash flow forecasts and exercising cost control
• project management

Building surveyors advise clients on:

• construction and economic of buildings: condition of buildings; analysis of capital and running costs; monitoring the effect of construction works on existing buildings; feasibility studies, covering plot ratio and site coverage, preparation of sketch plans, assessment of development potential as well as financial and economic considerations
• law related to buildings: advice on building and town planning applications and on building legislation
• building maintenance: planning and implementation of maintenance programmes; investigation of construction defects and design and supervision
• project management: acting as project managers; control and supervision of building and fitting out works; coordination of specialist works such as building services; landscaping, security, etc.

Land surveyors are involved in the following activities:

• cadastral surveying: concerns with the physical determination of boundaries and areas of land properties
• engineering surveying: preparation of initial site survey plans; computation of construction alignment for civil engineering works; setting out pre-determined positions for construction; measurement of earthwork quantities and monitoring slopes
• geodetic surveying: establishment and maintenance of horizontal and vertical reference point
• topographic surveying and digital mapping: production of survey plans and maps at various scales
• land information management
• photogrammetric surveying: production of survey plans and maps from photographs
• hydrographic surveying: determination of depth and topography of the sea bed

Core business aside, revenues generated from other related businesses such as real estate leasing, development, maintenance management, development consultancy and brokerage and agency can be substantially higher.

Services Providers

The Hong Kong Institute of Surveyors (HKIS) is a professional body established in 1984. As at 15 February 2012, the HKIS had a total corporate membership of 6,278.

Exports

In recent years, the construction boom in the region has generated surging demand for surveyors. The opening up of the construction market in the region has created a growing export market for Hong Kong developers as well as the surveying profession. Nearly all the leading surveying companies have undertaken projects throughout East Asia. The Chinese mainland is by far the largest export market, accounting for the bulk of total export income for this profession. The Chinese mainland aside, Hong Kong-based surveying companies have also set their sight further afield, including the Middle East market. Thanks to the reliable and professional services, as well as proficiency in English, Hong Kong quantity surveyors are in increasing demand for construction work in Asia (e.g. India) and other overseas markets (e.g. the Middle East and ASEAN countries).

As the primary function of quantity surveyors is associated with costing and cost control, quantity surveying is probably the easiest to promote overseas. Over the last decade or so, Asian countries have increasingly adopted the use of quantity surveyors in construction and the demand for this service in Asia has grown rapidly. General practice surveying has a strong element of local market knowledge. The best services to export are feasibility studies and appraisals for development and investment projects.

Industry Development and Market Outlook

One-shop approach

"One-shop" approach to surveying services has become increasingly popular. Most of the newly established surveying firms aim to provide comprehensive consultancy services to their clients. These range from development consultancy, project management, property consultancy to interior design and fitting out work. Horizontal diversification to services such as property management, building cleaning and security helps widen the revenue pool and lower risks due to the fluctuating real estate and construction market.

Increasing local needs of surveying service

As the Hong Kong government has advocated the private sector’s active involvement in the provision of public facilities, surveying services providers play an increasingly active role in advising the best terms of arrangement for Public Private Partnership (PPP) projects.

In the Chief Executive’s Policy Address in October 2007, ten major infrastructure projects were announced, many of which have had their details published with tenders released, which are expected to keep driving up local construction activities. To facilitate the development of the six new industries (namely, cultural and creative industries, environmental industries, innovation and technology, medical services, educational services, and testing and certification), the Hong Kong government has loosened restrictions on the redevelopment and conversion of existing industrial buildings.

In the Chief Executive’s Policy Address 2009, the government announced initiatives to better utilise vacant or under-utilised industrial buildings through redevelopment or wholesale conversion. Further, in the Policy Address of 2011, the government outlined its plan to develop another core business district in East Kowloon. These policy initiatives, together with the continued stream of small-scale infrastructure projects and revitalisation of heritage sites underway, point to a growing demand for local surveying services.

Export of Surveyors

In the past few years, the Middle East’s construction boom led to an outflow of Hong Kong surveyors. Some of them joined surveying firms in the Middle East, with others transferred to the Middle East branches by the international surveying firms. Despite the Dubai financial crisis of 2009 and the Arab Spring of 2011, resource-rich markets in the region, such as Saudi Arabia, Qatar and Abu Dhabi, have been relatively less affected, even in the face of the uncertainty of the global economy.

Hong Kong surveyors are also popular on the Chinese mainland. Under the CEPA framework, agreements on mutual recognition of qualification are signed between the Hong Kong Institute of Surveyors and industry associations on the mainland, thus enhancing the access of Hong Kong surveyors to the mainland market. Apart from that, senior Hong Kong surveyors are also hired by international surveying firms to work in their mainland operations, thanks to their solid experience and knowledge on the mainland market.

In view of the rapid economic development in ASEAN countries like Indonesia, Vietnam and Myanmar, there will be huge demand for construction activities in those countries, thus generating more business opportunities to Hong Kong surveyors in the future. 

China's real estate development and construction market

The housing market has been more open to foreign investors since the housing reform and WTO accession in 2001. Furthermore, ongoing urbanisation on the Chinese mainland continues to generate huge demand for infrastructure. Despite various administrative measures introduced in recent years to regulate the mainland’s property market, the market continues to look promising on the whole, especially in some second-tier mainland cities. Increasing investments from the Hong Kong, mainland and foreign investors in the mainland’s real estate projects provides business opportunities for Hong Kong contractors and surveyors, thanks to their professionalism and recognised service standard.

Quantity surveying services will continue to grow along with the increase in property projects and a growing understanding of mainland developers on the advantages of coordinating tendering, contractual arrangements and budgeting by quantity surveyors.

Infrastructure projects in the region

To help sustain economic growth, many Asian countries (e.g. India and Indonesia) have urgent needs to upgrade their basic infrastructure, road networks, port facilities, housing and city planning. According to the Asian Development Bank, Asia will require US$8.2 trillion on infrastructure investment in 2010-2020, meaning an annual average demand of US$820 billion. Private participation is on the rise. Foreign firms are increasingly allowed to participate as investors in owning as well as managing these projects. An increasing number of infrastructure projects, higher involvement of foreign developers and a shortage of local professionals will create good opportunities for Hong Kong firms in exporting surveying services.

Apart from infrastructure, more shopping malls are being built or renovated in many Asian countries, including China, India, Indonesia, Thailand and Malaysia. The rise of Asian consumerism has prompted much investment in modernising retail distribution channels. It also leads to an increasing demand for professional shopping mall management services in those countries. Hong Kong surveying firms which aim at opening or diversifying into new markets can tap into this fast-growing sector.

The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)

Under the CEPA framework, reciprocity agreements on professional qualification recognition have been sought with the China Institute of Real Estate Appraisers and Agents (CIREA), the China Engineering Cost Association (CECA) and the China Association of Engineering Consultants (CAEC):

In November 2003, the Hong Kong Institute of Surveyors signed a Reciprocity Agreement with the CIREA on mutual qualification recognition. Under the terms of the Agreement, corporate members of the General Practice Division (GPD) who satisfy the application requirements are eligible for the reciprocal recognition of the CIREA if they have satisfactorily undertaken a 3-day (16 hours) training and test session conducted by the latter. As at November 2011, 197 practitioners from the HKIS’ GPD had been given recognition by the CIREA.

In May 2005, the Hong Kong Institute of Surveyors (Quantity Surveying Division) reached a reciprocity agreement with the CECA on professional qualification recognition. The first training and assessment for members in Quantity Surveying Division of HKIS and CECA members from the mainland was held in December 2005. As at November 2011, 339 quantity surveyors of HKIS had gained professional qualification on the mainland, with 79 having registered as CECA member to practice on the Chinese mainland.

In June 2006, the HKIS signed the mutual recognition agreement with the CAEC. Under the agreement, members of the HKIS' Building Surveying Division (BSD) with 5 years of relevant post-qualification experience will be eligible for application to be recognised for registration as engineering consultants on the mainland. Successful applicants would be subject to the registration system as established under the prevailing regulations published by the Ministry of Housing and Urban-Rural Development (MOHURD) (formerly, the Ministry of Construction). In July 2007, the first training and assessment for members in the HKIS’s BSD and CAEC members from the mainland was held in Shenzhen. As at November 2011, 228 members of the HKIS’s BSD had obtained professional qualification on the mainland, with two of them having registered as CAEC member to practise on the Chinese mainland.