(7 February 2024, Hong Kong) Property owners play a vital role in providing charging facilities at their carparks amid the robust growth of Electric Vehicles (EV) in Hong Kong, according to CBRE’s latest research report “Electric Vehicles and Real Estate: The Case of Hong Kong”.
“Despite being a small market, Hong Kong is having a rapid, high diffusion of EVs, with the sale of EVs accounted for over 53% of the city’s private car sales in 2022, the highest in Asia and third highest globally after Norway and Iceland,” said Marcos Chan, Executive Director, Head of Research, CBRE Hong Kong. “The growing market comes with the additional demand for retail spaces for showrooms, as well as industrial space for storage and workshops. As dealers compete to gain more market share, we have seen noticeable transactions in recent years and expect more to come.”
The shift from fuel-powered vehicles to EVs also highlights the need for sufficient chargers. Many of Hong Kong’s high-rise buildings are built with small floorplates, posting challenges for the installation of EV charging infrastructure, which might take up additional floorspace and reduce the efficiency of public areas in the building.
Uneven, Limited Supply of EV Chargers
Public chargers remain in high demand given the limited presence of private chargers. While there were about 70,000 EVs in Hong Kong as of November 2023, CBRE Research estimates the number of citywide chargers is in the range of 40,000 and only about 8,000 chargers are available for public charging, the rest are private. As such, Hong Kong has 0.5-0.6 charger per registered EV and this is reduced to 0.1 charger per EV if only public charger is considered.
Currently, commercial complexes and government/quasi-government buildings are two major suppliers of public charges, amounting to 45% and 40% of the citywide provisions respectively, followed by residential (14%).
Kowloon East has the highest number of EV chargers in office buildings and Wan Chai / Causeway Bay has the greatest number of office buildings installed with chargers despite the small provisions in each of them.
EV Charger Planning for Property Owners
“With the demand for EV chargers escalating, EV charging facilities are seen as a value-added service to drive footfall for shopping malls and are on the wish list for office tenants who prioritized ESG,” added Marcos Chan. “Property owners play an important role in providing publicly-accessible chargers. It might be easier for owners of single-owned properties and new developments with high power capacity to install EV chargers.”
Given the relatively affordable costs of the chargers and the variety of business models available to set up public charging facilities, CAPEX is not necessarily the highest barrier. Challenges come from how to get the infrastructure done. Power capacity is limited in some highly developed locations. Private sector landlords are advised to explore and secure power reserve before the competition intensifies.
“The government has recently proceeded to include a new condition in new leases of petrol-filling stations to cap the price of charging for specific types of e-Commercial Vehicles, including e-taxis and electric public light buses. The level of charging fee cap will serve as a benchmark for other commercial car parks, and we encourage private car park owners to pay attention to the newly released government policies when levying charging rates,” said Shana Lam, Senior Director, Valuation & Advisory Services, CBRE Hong Kong.
Property owners are also mindful of the types of chargers that should be installed. Slow and medium chargers are suitable for office carparks as white collars usually leave their cars stationary during the day. On the other hand, shopping malls are advised to have both medium and fast chargers, balancing the various needs of different shoppers.
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Marcos Chan, Executive Director, Head of Research, CBRE Hong Kong
Shana Lam, Senior Director, Valuation & Advisory Services, CBRE Hong Kong