Cable & Wireless HKT is to establish the largest data centre on Hong Kong Island, with plans to rent almost the whole block of a Shau Kei Wan industrial building. Sources said a convenient location for the sizeable centre was strategically important to the telecommunications giant's plan to establish 700,000 square feet of data centres in three years. In order to operate its data-centre business, HKT has established 300,000 sq ft of space across Wan Chai, Sheung Wan, Quarry Bay, Tsim Sha Tsui and Sha Tin. HKT was close to signing a leasing agreement with E Wah Construction and Aik San Realty for more than 200,000 sq ft of space in the two developers' Cyber Centre in Island East, sources said. They said the rent was about HK$11 to HK$12 per sq ft a month, well above the HK$7 to HK$8 per sq ft at similar industrial buildings in the area. HKT's Shau Kei Wan data centre will be the largest on Hong Kong Island until the end of the year, when Sunevision Holdings' subsidiary iAdvantage is due to set up a 350,000 sq ft data centre in Chai Wan. Cyber Centre, in A Kung Ngam Road in Shau Kei Wan, will be ready for occupation in the middle of the year. Sources said a Hong Kong Island location was important to data centres because of the convenience for clients in the central business district. Another HKT data centre, 80,000 sq ft in Somerset House, Quarry Bay, started operations a few weeks ago. The 330,000 sq ft Cyber Centre has secured two tenants other than HKT for four floors, each with about 16,000 sq ft. Singapore Telecommunications has rented the second and third floors at the centre for HK$11 per sq ft. Another tenant is a United States data-centre operator. HKT recently rebranded its data-centre business as Powerb@se . It intends to invest more than HK$1 billion to set up in 10 Asian cities one million sq ft of such centres, of which 700,000 sq ft will be in Hong Kong. Two weeks ago, Pioneer Industries International (Holdings) teamed with Morgan Stanley Real Estate Fund to buy Winsor Centre in Tsuen Wan for about HK$900 million. The 1.24 million sq ft industrial building is to be converted into the largest data centre in Hong Kong. Analysts said the large amount of investment involved in this business reflected investors' optimism about its prospects.