GDS plans HK$1.5b investment in new data centres

Mainland technology services firm to ramp up city operations to support financial institutions

PUBLISHED : Monday, 28 January, 2013, 12:00am
UPDATED : Monday, 28 January, 2013, 5:56am

GDS, a mainland information-technology services group backed by the World Bank, aims to invest more than HK$1.5 billion to build two advanced data centres in Hong Kong.

Privately held GDS, which is based in Beijing, intends to develop a primary facility and a backup site to meet the offshore requirements of its principal customers on the mainland, including more than 150 Chinese financial institutions.

"We plan to invest more than US$200 million in stages over a five-year period to develop two data centres in Hong Kong," William Huang, the founder and chief executive of GDS, told the South China Morning Post.

GDS management was talking to a number of undisclosed property companies and financial institutions as potential new partners and investors, Huang said. He added it was the company's goal to become "the No1 specialist data-centre services provider in China" in the next five years, which meant fresh funding was needed.

A data centre is a secure, temperature-controlled facility that houses large-capacity server computers and data-storage systems, and is equipped with multiple power sources and high-bandwidth links to the internet.

Huang said group subsidiary GDS Infrastructure was exploring potential locations in Hong Kong to set up the first of its two data centres this year. The estimated gross floor area of these two facilities would be 20,000 square metres.

Dan Newman, the group's chief financial officer, said Tseung Kwan O had become an attractive spot for many service providers to locate their data centres, but GDS was studying alternative sites for its planned backup facility.

"It's quite feasible to do a building conversion in the near term," Newman said.

The Hong Kong government has been encouraging private companies to redevelop old industrial buildings and lots into data centres.

Large data centres in the city tend to cluster around the districts of Tsuen Wan, Kwai Chung, Sha Tin, Kwun Tong, Kowloon Bay, San Po Kong, Quarry Bay, Chai Wan, and Tseung Kwan O, according to the Office of the Government Chief Information Officer, the agency that sets local policies for information and communications technologies.

Huang said GDS expected to hire up to 100 new employees in Hong Kong over three years under its expansion plan. The company employs more than 500 staff on the mainland, where it currently operates 15 data centres.

Founded in 2000, GDS successfully landed the International Finance Corp, the investment arm of the World Bank, as an investor in 2007. The mainland firm's other key investors included Softbank China Venture Capital and Everbright Investment & Management.