Hong Kong has become the world’s most vertical city

Next month, on September 3, the world will celebrate Skyscraper Day when Hong Kong is expected to be crowned, again, as the city having the most skyscrapers. According to the Chicago-based Council on Vertical Urbanization, Hong Kong has 596 skyscrapers over 150 meters in height.

The city has been forced to build vertically due to its small land area and dense population and its skyline is among the most renowned in the world thanks to its robust financial sector, international trade connections, and creative urban planning.

Following up is Shenzhen with 444 skyscrapers and New York third with 317. The tallest building in the world is the Buri Khalifa in Dubai reach 828 meters and has 163 floors for hotels, residence, offices, observation decks and communication systems.

The council adds that Skyscraper Day is the ideal time to examine which cities have the most skyscrapers and how they represent advancements in economy and design.

Also, the Council on Tall Buildings and Urban Habitat has weighed in noting that when it comes to soaring skylines and architectural marvels, no country has embraced the vertical revolution quite like China. Hong Kong, along with Shenzhen, and Guangzhou (5th position) are part of a burgeoning megacity known as the Greater Bay Area, which is home to over 1,500 skyscrapers. This is even more impressive when considering that Shenzhen, which now boasts a population of 17 million people, was just a small fishing village until the 1970s.

Looking at this data from another perspective, China actually has more skyscrapers than the rest of the world combined. China has 12 cities, 2777 skyscrapers and 72 supertalls (300-599 meters tall) in the top 20, compared to the rest of the world with 13 cities, 2350 skyscrapers and 67 supertalls.

China’s prominence in the world of skyscrapers—with three cities in the top five globally—is likely to remain unchallenged, especially with the expected dominance of high risers in Hong Kong’s Northern Metropolis development, slated for completion in 2036.

In Hong Kong, the tallest building is the 484-meter-tall International Commerce Center which has 108 floors for the Ritz Carlton hotel, offices and retail outlets. It is also the 14th tallest building in the world.

This is followed by Two International Finance Center reaching 415 meters and home to the Hong Kong Monetary Authority which is housed from the 77th to 88th floors of the building. And third on the list is Central Plaza in Wanchai which is 374 meters tall with 78 floors of office space. On the 75th floor is a church – iSEE Church, formerly known as the Sky City Church – which is the tallest church in the world.

But tall buildings bring their own problems, especially with urban planning. In this regard, Hong Kong has long addressed the problem of the "Wall Effect" high risers present and instead has transformed its vast skyline into a global leader in sustainable construction.

The Hong Kong Planning Department has introduced strict Urban Design Guidelines and Sustainable Building Standards to break up the long rows of uniform high-rises. Developers are required to leave wide gaps, known as "breezeways," between tall buildings so that these air corridors enable natural sea breezes to flow through, cooling the streets and dispersing vehicle exhaust.
Also, the collaborative effort between the government and the construction industry has established Hong Kong as an internationally recognized hub for green high-rises. New buildings, for example, are required to allocate between 20 and 30 per cent of their site to green spaces, leading to high-rise developments featuring lush sky gardens, green roofs, and vertical planting walls that help absorb heat.

A classic example of this is The Henderson in Hong Kong’s busy central business district, which ranks it among Asia’s greenest skyscrapers, having achieved a top-tier Platinum certification for its smart, zero-carbon cooling systems and resilient layouts.

The certification process was conferred by the LEED global rankings of sustainable and environmental friendly buildings which placed Hong Kong sixth worldwide (and fourth in Asia) for meeting its strict criteria.

The verticalization of Hong Kong is necessary because of severe shortage of land. About 43 per cent of the total land area falls within the protected areas such as country parks, marine parks, wetland, sites of special scientific interest, and water gathering grounds. These areas are either statutorily protected or highly restricted from development. Development can only go up. But this has also bought a premium on land supply and price.

All land in Hong Kong is owned by the government, except where St John’s Cathedral stands, which was granted a freehold in perpetuity to the Church of England in 1847. The government leases and grants land for ownership for long periods of time, generally about 50 years or more. Land is released for development in a timely manner depending on demand generally through auctions. So for the current quarter, only one piece of land for residential use will be offered for sale in Kowloon to provide for some 250 high-rise flats.

The measured land release comes as Hong Kong’s residential market shows signs of recovery after years of downturn and when the government has lowered its land premium revenue target for the 2026-27 financial year to about HK$18 billion (US$2.3 billion).

For the current quarter, supply would also include more than 3,000 units from the first Northern Metropolis large-scale land disposal project in Hung Shui Kiu. The government aims to award the tender during the next week or so.

The Hung Shui Kiu pilot site marked the first land sale under the government’s new large-scale land disposal model for the Northern Metropolis.

Again, all of the once fertile agricultural and fish pond land in the Northern Metropolis will be transformed into a sea of high rise futuristic buildings to keep Hong Kong at the top of the skyscraper ratings for many years to come.

Mark Pinkstone

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The continued success of Hong Kong over the years can be attributed to one fact: it’s low and simple tax system. It has always been a major selling point to woo expatriate experts to Hong Kong to drive its financial and other services to be competitive with world markets.

US doomsday prophet Stephen Roach was quick to point out that thousands left Hong Kong during the COVID pandemic in 2020. But he has failed to mention the thousands that have returned since that dark period, which, according to US financial media giant Bloomberg, are responding to a booming initial public offering market, planned tax breaks for private equity and hedge funds, and a more vibrant city.

Bloomberg provided its financial clients worldwide with an in-depth feature on Hong Kong as it is today. Titled “Finance Expats Flock Back to Hong Kong Seeking Low Taxes, Better Jobs”, the 2,500-word article cited expatriates who had left and returned saying that although the cost of living in Hong Kong was relatively high, the tax relief outweighed these costs.

Hong Kong’s tax is simple. It is divided into three categories – individual, business and property owners. For individuals the standard tax rate is 15 per cent, for businesses, a two-tiered profits tax applies – 8.25 per cent of the first HK$2 million and 16.5 per cent thereafter – and property tax is 15 per cent of net assessable value. There is also an ad valorem stamp duty on property transactions ranging from $100 on property under $4 million to 4.25 per cent on property exceeding $27.39 million. Transactions exceeding $100 million hit a rate of 6.5 per cent duty.

There is no sales tax (save for tobacco and alcohol), VAT, withholding tax, capital gains tax, estate tax or dividend tax. The global average for sales tax is 13.7 per cent and the Asian average is 9.6 per cent.

Bloomberg noted that there were 31,278 employment visa approvals last year, more than double the number five years ago, with many going to nationals from Japan, South Korea and the UK. In financial services, some 2,343 visas issued to foreigners rose by 17 per cent last year to the highest since 2022.

While the sustainability of the influx may hinge on the strength of the IPO market, global financial firms including Bank of America and HSBC Holdings are among those signalling confidence in Hong Kong. Many new high-rise office blocks which saw low occupancy rates a few years ago are now reporting almost full capacity, another indicator of confidence in the business sector. Bloomberg said Hong Kong is aggressively promoting the city’s low taxes and comparative lack of red tape to the world’s ultra-rich business owners and money managers.

Hong Kong and Singapore rank third and fourth behind New York and London in the latest Global Financial Centres Index. Singapore’s tax rate is similar to Hong Kong (15 per cent for eexpatriates,4 per cent for director’s fees, and 17 per cent flat rate for corporations). A number of individuals and corporations fled to Singapore during the pandemic, but with Hong Kong fast becoming the financial hub of Asia, many are now returning, causing the Singapore Monetary Authority to entice investment firms to stay by cutting their taxes.

With neighbouring countries upping their incentives to woo the investment firms and experts, Hong Kong is keeping ahead of its competitors by eliminating the tax on hedge fund profits and plans to promote the development of Corporate Treasury Centres (CTCs). The tiered tax regime proposed is precisely designed to address the main points of the industry in a targeted manner, providing eligible corporations with more comprehensive tax benefits, greater tax certainty, and enhanced compliance flexibility. The government will also revamp the existing tax concession regime applicable to corporate treasury activities and introduce a more competitive tiered system. These measures include refining the existing concession regime and introducing a pre-approval mechanism. Pre-approved CTCs and their pre-approved associated companies will enjoy more favourable tax benefits, greater tax certainty and enhanced compliance flexibility.

These innovative, pragmatic, and competitive measures are expected to attract more multinational corporations from different regions and sectors to make full use of Hong Kong's role as a platform with the new catch phrase of 'bringing in and going global', and to bring their funds and core business to Hong Kong for centralized management, thereby strengthening Hong Kong's position as a major base for CTCs.

In June the government announced that with immediate effect, tax on the profits of hedge funds would be eliminated. By removing taxes on performance income, which are typically levied on profits generated from investment strategies, the city aims to create a more attractive environment for hedge fund operations. By eliminating the tax burden on performance income, Hong Kong is positioning itself as a favourable jurisdiction for hedge funds seeking to maximize their profitability. Industry experts predict that this policy change could lead to an influx of hedge funds relocating to Hong Kong, as fund managers look for jurisdictions that offer more favourable tax regimes.

Hong Kong’s long-standing policy of a low tax regime has been the magnet to draw the best of the best to its shores and invest in its future as a leading global financial centre.