Growing demand for data services centres has lifted hopes for better-quality industrial properties. Telecommunications operators and developers are joining the rush to provide server co-location services through upgrading existing industrial buildings, or leasing industrial space to set up data services centres. Last week, Cable & Wireless HKT unveiled a HK$1 billion plan to expand the space occupied by its Hong Kong data centres to 700,000 square feet, from 300,000 sq ft, by 2002. It will add a further 300,000 sq ft in the region by 2002. The recent sale of Winsor Centre, a 1.24 million sq ft industrial/godown building in Tsuen Wan, to an investor who plans to convert it into the SAR's largest data centre is also positive news. An HKT spokesman said the company would either convert its existing exchange buildings or lease space at decent industrial buildings for the expansion of its data services centres. But she said the company would only consider those buildings that fulfilled all its requirements, including the provision of security and power-generating facilities. Not every industrial building was suitable for a data services centre, she said. The company last week opened its sixth data services centre, comprising 80,000 sq ft, at Somerset House in Quarry Bay. Cable & Wirless HKT data services centres director Joseph Ma said centres did not simply provide space for tenants. The company had more than 100 computer engineers to supply back-up services to clients. Quality of service was important to maintain customers although packages for data services centres would become more competitive in future, he said. Property agents who consult end-users looking for data-centre operations are divided on the effect the trial property sector will have on the market. DTZ Debenham Tie Leung director Francis Li said the demand for data centre space was strong. 'You will find almost every company now looking to establish their Web site,' he said. He said recent leasing deals showed operators were willing to pay premium rentals for appropriate space. Such demand would not benefit all industrial buildings as only some new properties could fulfil the specific requirements of data centres, he said. Mr Li predicted demand for data centres might vary but the long-term prospects were still promising as Hong Kong would develop as an e-commerce hub. He urged the Government to clear up the grey area which allowed the use of industrial buildings as data centres. Cushman and Wakefield director Simon Chow said demand for data centres would not alter the depressed market for industrial buildings. 'The case of the Winsor Centre transaction was very exceptional,' he said. Mr Chow said it was difficult for medium-sized developers to run such businesses. 'A data centre is a risky business,' he said. 'As data centres require a high degree of security, clients will only lease space operated by those they have confidence in.' 'It's just like operating safe deposit boxes. Of course, [anyone] can operate such boxes. But will anybody trust you if you are not a banker?' Mr Chow said data centres needed to offer 24-hour services and be free from human disturbances. Headroom had to be 12 feet or the centre's racks would be fully utilised in a short period. There should be strong back-up for electricity and fibre-optic networks. Most importantly, locations should be convenient. He said many existing data centres were run in sub-standard buildings and quality centres would overtake them in future. Sun Hung Kai Properties' technology arm Sunevision has earmarked HK$2.17 billion for data centre expansion in the region by 2001. Alex Tam, chief executive of Sunevision's subsidiary iAdvantage, said the first 20,000 sq ft data services centre at Millennium City in Kwun Tong was fully occupied. Another 150,000 sq ft at Jumbo Advantage in Tsuen Wan would open this month. He said that iAdvantage would move its office, currently at Millennium City, to the proposed 350,000 sq ft Mega Advantage in Chai Wan by the end of the year. Henderson Land Development will invest HK$300 million to upgrade three of its buildings into data services centres.