There are various architectural features of a residential building that can influence its indoor climate and electricity consumption, such as thermal insulation, window size, glazing material, albedo of building facade and orientation. In addition to these architectural features, shading effects (either by external objects or by the building itself) can also affect the thermal performance of a building. External shading effects are mainly caused by nearby trees or buildings, while shading effect imposed by the building itself usually depends on the layout design of the building, i.e. building shape and layout arrangement of the flats on each floor. Some flats in a building may receive a shading effect from adjacent flats located in the same building block. When architects or building designers conduct the layout design of a building, a number of factors such as building regulations, site limitations, scenic view, noise control, natural ventilation and daylight utilization will be considered. The thermal performance of a building is one of the major issues that should be taken into account. The objective of this study is to assess the thermal performance of residential buildings under the effect of adjacent shading in subtropical Hong Kong. A literature survey was carried out to identify typical layout designs of residential buildings from the past two decades. Building energy simulations were conducted for residential building blocks with different layout designs. It is found that adjacent shading effect has a substantial impact on the thermal performance of residential buildings. The findings are reported in this paper. (C) 2011 Elsevier Ltd. All rights reserved.