Hong Kong well positioned as Asia’s prime location for data centres, says SuneVision chief
Hong Kong’s strategic location and well-established infrastructure are fuelling the city’s development as a prime Asia location for data centres, according to Peter Yan, chief executive of Hong Kong-listed SuneVision.
Yan, however, said the Hong Kong government should level the playing field for data centre providers to ensure the industry’s healthy development.
SuneVision, controlled by property developer Sun Hung Kai Properties, is a major data centre provider in the city through its unlisted subsidiary iAdvantage, with an estimated 14 per cent market share.
“Multimedia content providers and cloud companies have big demand for data centres for storage and networking. Hong Kong is an attractive choice for them,” said Yan. He expects the market to grow more than 10 per cent per annum over the next few years.
His estimate is in line with a report released by DBS Securities last September that forecast the city’s data centre market to grow 15 per cent annually over the next three to five years, with new demand generated by the hosting needs of multimedia content providers such as LeTV, internet players like Tencent Holdings, as well as the increasing adoption of cloud technology by businesses.
In 2013, iAdvantage bought a one-hectare government greenfield site in Tseung Kwan O district. It plans to build a 470,000 square foot data centre, which will offer computer storage services to other businesses.
Meanwhile, to help promote Hong Kong as a prime Asia location for data centres, the government is offering land in Tsueng Kwan O Industrial Estate at a subsidised rental rate.
“These companies are required to use the [Tseung Kwan O] facility for their own use. They are not allowed to sublet space within their facilities to make money, according to the government’s rules,” said Yan.
“But the restrictions are not enforced properly and there are companies in the Tsueng Kwan O estate violating the rules by subletting space even though the government has been taking action to stop the malpractice,” he said.
This was unfair to companies like SuneVision that have facilities outside the estate and do not receive the subsidies, said Yan, who wants the government to level the playing field in this respect.
Yan said Hong Kong was a gateway between China and the rest of the world, so international companies interested in the mainland market would first start their business in the city. Mainland companies also choose Hong Kong as a springboard to the world market, attracted by the city’s reliable legal system and cybersecurity measures.