Hong Kong’s rapid digital transformation leads to demand for data centres

Digital acceleration is also driven by the government’s push for development in innovation and technology 

According to The Standard, numerous industrial buildings in Hong Kong’s Kwai Tsing District transformed into data centres due to the government’s robust promotion of the development of innovation and technology, including the higher demand for network connection amid the pandemic.  

Hong Kong is known to have one of the most expensive properties in the world, considering its tight supply of land.  

However, with the advent of the 5G era, as well as the quick development of the Internet of Things (IoT) and artificial intelligence, various industries have accelerated their digital transformation and demand for data centre facilities and services.  

Along with the policy of industrial-building revitalisation, more than six projects in Kwai Tsing have been applied for reconstruction and changing them into data centres. Half are under the Chinese data centre solution provider GDS (9698), involving a gross floor area of around 750,000 square feet.  

The first one to be completed among the three is Luen Fat Industrial (First) Building at No 2-16 Lam Tin Street. It has been approved for the construction of a 23-storey data centre with a total gross floor area of about 246,800 square feet and is expected to be completed in 2022 at the earliest. 

By the middle of 2022, it will provide data centre services for financial institutions, international telecommunications operators and local enterprises, and internet and cloud service providers.  

The last construction among the six projects is from Soundwill (0878) for the redevelopment of a 20-storey data centre with a total gross floor area of about 218,000 square feet in the South China Cold Storage Industrial Building. 

More: Hong Kong’s office space availability rate drops to 13.9% in Q3 2021 

A senior executive at local developer Grand Ming Group (1271) said the spread of big data and 5G technology is the general trend of future development in the world.  

Vincent Cheung Kiu-cho, managing director of Vincorn Consulting and Appraisal, anticipates the demand for data centre services to continue to grow as the use of cloud-based applications, big data analysis, and artificial intelligence popularises during the pandemic.