SuneVision data centre project stays on course

SHKP unit goes ahead with its HK$4 billion high-tier facility in Tseung Kwan O despite Google's decision to drop its plan in the area

PUBLISHED : Tuesday, 17 December, 2013, 3:55am
UPDATED : Tuesday, 17 December, 2013, 3:55am

Undeterred by Google's decision to abandon its data centre plan in Tseung Kwan O, SuneVision, the locally listed technology arm of Sun Hung Kai Properties, is going ahead with its own high-tier data centre project that could cost about HK$4 billion.

"We are very positive on the market outlook for data centres," said Peter Yan King-shun, the executive director and chief executive at SuneVision, which also has data centres in Chai Wan, Kwun Tong, Sha Tin and Tsuen Wan.

In October, the company won a site in Area 85 on Wan Po Road in Tseung Kwan O for HK$428 million, or HK$957 per square foot, in a government tender. The site, which will yield a gross floor area of 473,611 sqft, is about five minutes' drive from the one Google won in 2011.

John Siu, managing director of international property consultant Cushman & Wakefield Hong Kong, estimated SuneVision's project could involve an investment cost of HK$3.8 billion to HK$4.8 billion.

Yan did not disclose the company's total investment cost but said it would be at the low end of market estimates.

He said the first phase, or at least 60 per cent of the gross floor area, would come on stream by the end of 2018.

Siu played down the impact of Google's decision to abort its plan, saying there was increasing demand for high-tier rack spaces from corporate users.

"We keep receiving inquiries from investors interested in data centres in Hong Kong. Some of them are new to the city while others are existing players seeking to add more space," he said.

Last week, Google was reported to have abandoned its US$100 million data centre plan at the Tseung Kwan O Industrial Estate due to a lack of available land.

"While we see tremendous opportunity in Hong Kong … we will not be moving ahead with this project," the Wall Street Journal quoted Taj Meadows, Asia-Pacific policy communications manager, as saying.

The decision came two years after a groundbreaking ceremony at Google's Tseung Kwan O site, which still lies unused.

A spokesman for Hong Kong Science & Technology Parks, which granted the site to Google in 2011, said the land would not be re-tendered in the short term.

"The corporation is conducting a review of land use planning for the remaining [untendered] land in the two industrial estates [in Tseung Kwan O and Yuen Long]. This [Google] land will be included in the review as well. No land will be opened for application before the completion of the study," said the spokesman.

Excluding Google's 2.7-hectare site, the Tseung Kwan O Industrial Estate still has 2.55 hectares of land, and there is 0.45 hectare of unsold land in Yuen Long. All land parcels in the Tai Po estate have been sold.

The Hong Kong Science Park spokesman said he expected the review might be completed in the second half of next year.

The corporation is working with Allied Trade, the name under which Google obtained the site, on the final arrangements of the surrender deal.

To meet growing demand, Siu urged the government to release more land in Tsuen Wan, Kwai Chung and Chai Wan for the construction of data centres.

He said he had received inquiries from a multinational telecommunications company looking for 100,000 sqft of space to set up a data centre in Hong Kong in 2010. "But it was finally forced to move to Singapore partly because there was no available space here," he said.