The area in Tseung Kwan O where Sun Hung Kai’s technology arm is building the region’s biggest data centre
Investment in new data centres in Asia has reached US$1.5 billion so far this year with Hong Kong, specifically Tseung Kwan O, getting the bulk of it. This is according to a report by Cushman and Wakefield. The real estate firm said the reasons for the growing interest in the sector were “the Internet of Things”, impending 5G and the fast rise of cloud computing.
In the second quarter of 2020, Hong Kong had 7.9 million sq ft of data centres. The biggest players are SUNeVision, the technology arm of Sun Hung Kai Properties, and PCCW Solutions, Equinix and OneAsia.
The largest data centre in the region is being built by SUNeViSION in Tseung Kwan O. It is called a “Mega Plus” facility and will join the firm’s 10 other data centres. SUNeVision paid HK$5.46 billion for a 1.2 million sq ft site at the mouth of Junk Bay nearly two years ago. Tseung Kwan O is reported to be capturing about one third of the region’s data centre developments.
Hong Kong is attractive to these operators because it waives land premiums for the technology sector and has low taxes and energy costs and good fibre connectivity. The big users of these data centres are finance, insurance, real estate and business service firms plus of course cloud computing operators such as Microsoft Azure, Google Cloud and Alibaba Cloud.
The only fly-in-the-ointment are the possible effects of the recently imposed National Security Law in Hong Kong. Google and Facebook have already stated that they will not be landing their new pan-Pacific high-capacity fibre optic cable in Hong Kong, but terminating it in Taiwan because of fears that data may be intercepted by PRC agencies. And a number of US social media giants have said they will not cooperate with local authorities in giving access to data related to infringement of these new laws, possibly resulting in them leaving Hong Kong all together.
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