APAC Data Centre Update: H2 2024

HONG KONG, CHINA ASIA PACIFIC PRIMARY MARKET

Colo Hyperscale Cloud Telco

FANLING

KEY INDICATORS*

SHA TIN

TSUEN WAN

581MW In Operation

21 / 46 Operators / Data Centres

TSUENG KWAN O

208MW / 490MW UC / Planned

21% Colo Vacancy

Colo Hyperscale Cloud Telco

HONG KONG ISLAND

MARKET OVERVIEW Hong Kong ranks as the second most densely populated data centre market after Singapore, serving approximately 12,750 people per megawatt (MW) of operational capacity. Despite this high density, Hong Kong remains a key data centre hub in the Asia Pacific region, with its operational capacity expected to double over the next five years. This optimism is reflected in the aggressive expansion plans of data centre operators, as the supply pipeline nearly doubled to 700MW by the end of 2024, up from 317MW in 2023. While SUNeVision continues to lead as the largest data centre operator in Hong Kong, other major players, including Equinix and DayOne (formerly GDS), also hold significant existing and future development capacities. Tseung Kwan O has retained its position as the largest data centre cluster, accounting for nearly 50% of the city’s operational capacity. However, the cluster spanning Tsuen Wan and Kwai Chung districts is experiencing the highest development activity, representing 48% of the total pipeline. While some of the future supply has been pre-committed by hyperscalers, the various options of new stocks will provide opportunities for data centre occupiers to secure favorable terms and further expand their footprint in the city over the next few years. Stable demand from hyperscaler activities contributed to the decline in vacancy rates, dropping to 21% in H2 2024. Alongside the growing development pipeline, colocation providers are actively upgrading their facilities to support AI hosting and meet evolving client requirements. In the latter half of 2024, Global Switch introduced direct liquid cooling at its Tseung Kwan O data centre, catering to the increasing AI-driven demand, particularly from Chinese clients. In October 2024, the Hong Kong government released its first set of guidelines for the responsible application of AI. In an official statement, the government advised banks and financial institutions to establish an AI governance strategy outlining how AI systems should be implemented and utilized. The guidelines emphasize a risk-based approach to AI procurement, usage, and management, advocating for human oversight to mitigate potential risks.

ECOSYSTEM DEVELOPMENTS •

China Mobile and I Squared Capital have submitted the bid to acquire HKBN, a Hong Kong based corporate & home fibre broadband service provider. As per media reports, HKBN has over 907,000 residential broadband customers and 98,000 enterprise clients. The final bids are likely to exceed US$1B. • Goodman Group announced that it completed the development of a data centre with a capacity of 50MW at its Tsuen Wan West campus and handed over to DayOne (previously GDS, HK3). This was the third building that was completed in the campus having a total potential of 225MW when fully built. • Hong Kong Telecom (HKT) shut down its 2G network and reallocated the released spectrum towards its 5G network. Several other markets have taken similar measures to discontinue legacy 2G and 3G networks to free up the bandwidth and improve the overall efficiency of their new generation 5G networks. • Inspur Cloud Services and Cyperport have signed a Memorandum of Understanding (MoU) for the development of AI infrastructure in Hong Kong. The MoU will see the two parties building the infrastructure for a computing cluster in Hong Kong focusing on building a computing power cluster and enhancing cloud computing capabilities within the region. • The Privacy Commissioner for Personal Data (PCPD) published the “Artificial Intelligence: Model Personal Data Protection Framework.” The framework aims to provide practical recommendations to organisations on their strategies to adopt third-party AI systems to comply with the Personal Data (Privacy) Ordinance (PDPO). • SUNeVision has signed a six-year partnership agreement with Green Valley Landfill (GVL) and CLP Power to purchase site-specific renewable energy certificates (RECs) for its “Mega” data centre campus. GVL’s solar farm is situated in Tseung Kwan O and expected to commence operations during H1 2025.

CUSHMAN & WAKEFIELD | ASIA PACIFIC DATA CENTRE MARKET OVERVIEW