APAC Data Centre H2 2023 Update

FANLING

ASIA PACIFIC ESTABLISHED MARKET

SHA TIN

TSUEN WAN

KEY INDICATORS*

20 OPERATORS, 51 DATA CENTRES 317MW UC / PLANNED

621MW IN OPERATION 35% COLO VACANCY

TSUENG KWAN O

* Definition: Key indicators are based on operational Hyperscale Cloud, Colo, Edge & Telco data centre facilities in the market and excludes Captive & ICT.

HONG KONG ISLAND

Colo Hyperscale Cloud Telco

MARKET OVERVIEW Hong Kong, a global financial and business capital and considered a gateway to mainland China, offers excellent regional and global connectivity and robust telecommunications infrastructure with a network of 12 external submarine optical fibre cable systems. Globally, Hong Kong is the lowest taxed data centre jurisdiction, and the Office of the local Government Chief Information Officer (OGCIO) is committed to further fostering Hong Kong as a prime data centre location in the Asia Pacific region and establishing the market as a hub for technological cooperation and trade. To support this, the OGCIO has established the Data Centre Facilitation Unit (DCFU), that provides details around the strategic advantages and benefits of establishing data centres in Hong Kong, availability of sites as well as government support to data centre operators. This initiative aims to attract significant investments, enhance infrastructure, facilitate industry collaboration, and ensure a conducive environment for data centre operations. With the ease of obtaining government approval for data centre developments and policies that provide incentives and funding assistance for data centre redevelopments. For conversion of existing industrial buildings for data centre use, the Hong Kong Government will waive the standard waiver fees currently chargeable to applications for conversion of existing industrial buildings to information technology and telecommunications industries use, which include data centres. However, the supply pipeline will be constrained in the medium to long term due to shortage of land and power supply, especially in Kwai Chung, Tsuen Wan, Shatin, Tsing Yi and Fanling, where it could take over 6 years to secure power and average land prices for data centre developments have appreciated 20-30% over the last few years. Locations such as Tuen Mun and Lantau Island provide better opportunities in relation to land and power, however, investors and operators are reluctant to pioneer new data centre territories in Hong Kong just yet. SUNeVision iAdvantage is the market leader by far in the Hong Kong market, with 29% total market share. Other international/regional operators like NTT, Global Switch, Equinix, Vantage, and GDS are also significant players in the market.

ECOSYSTEM DEVELOPMENTS • CLP Power Hong Kong (HK$200 million) is setting aside HK$5 million to conduct professional in-depth analysis of energy-saving possibilities for businesses in partnership with universities, research institutions and other professional organisations • Equinix has unveiled plans to extend support for advanced liquid cooling technologies to over 100 of its International Business Exchange (IBX) data centres across more than 45 global metropolitan areas, including 5 in Hong Kong. • ESR secured a US$205M Sustainability Linked Loan (SSL) that will be used to fund the conversion of a building in Kwai Chung into a 21.3MW facility named ESR Kwai Chung Data Centre HK1. • GDS announced the successful completion of HK1, its first self-built, self-operated data centre in Hong Kong. Located in the Kwai Chung district, HK1 data centre provides a total IT power capacity of 18.8MW with a floor area of approximately 22,931 sqm. At 22 stories, HK1 stands as one of Asia’s tallest purpose-built data centres. GDS currently operates or will soon operate 18 data centres within the Guangdong-Hong Kong Macao Greater Bay Area. The company, which is publicly listed in Hong Kong, has also pledged to achieve net-zero carbon emissions by 2030. • SUNeVision jointly announced a partnership with Digital Edge (Singapore) Holdings Pte. Ltd. To deliver state-of-the-art, carrier-neutral data centres and colocation services across Asia Pacific, including SUNeVision's seven data centres in Hong Kong. SUNeVision and HKBN Group also announced the commencement of operations of their joint-investment subsea cable system, TKO Connect . This project represents a significant milestone in next-generation subsea fibre cable systems as it enables ultra-reliable and seamless interconnection between the MEGA-i and MEGA Plus high-tier data centres in Hong Kong.