Hong Kong’s largest data centre is now live with China Telecom Global as its first client

Company starts work on second phase of the project which will open in 2019

PUBLISHED : Wednesday, 13 December, 2017, 6:40pm
UPDATED : Wednesday, 13 December, 2017, 10:38pm

UK-based Global Switch on Wednesday unveiled Hong Kong’s largest data centre in Tseung Kwan O Industrial Estate built at a cost of HK$5 billion (US$640 million).

The company said the data centre will provide customers a range of cloud and managed services in a highly secure environment and has been equipped with flexible loading dock facilities, storage and staging facilities.

John Corcoran, chief executive of Global Switch, said because of rising market demand, the company has already started construction work on the second phase of the project.

Once the centre becomes fully operational in 2019 it will provide 765,000 square feet of gross space, Corcoran said.

China Telecom Global, a subsidiary of telecommunications giant China Telecom, is the first tenant of Global Switch’s new facility, but the company did not reveal whether it had signed on other tenants.

Daily-Tech, a Chinese data centre operator, has partnered with Global Switch to operate the centre.

“The data centre will play an important role in delivering China’s Belt and Road Initiative in terms of providing information services,” said Li Qiang, chairman of Daily-Tech.

The data centre market in Hong Kong has faced setbacks in the past. In December 2013, Google pulled the plug on its Hong Kong project, which was also to come up in Tseung Kwan O, saying that it needed to “focus on locations where we can build for economies of scale”.

China Telecom Global sets sights on data centres for belt and road region

Four years later, Hong Kong now sees its growth inextricably linked to the ambitious development plans of large, nimble and deep-pocketed mainland Chinese companies.

“A large part of the Hong Kong market’s growth will ultimately be driven by the major Chinese internet companies – Tencent Holdings, Baidu and Alibaba Group Holding – that are rapidly expanding their businesses around the world,” said Jabez Tan, research director at Toronto-based Structure Research.

John Siu, managing director of Cushman & Wakefield, agrees that the unparalleled growth of e-commerce in China will benefit Hong Kong and fuel demand for data centres in the city, adding that the growth of the international division of Chinese banks in the city will be another key factor.

The real estate services company ranks Hong Kong as Asia’s third most desirable destination for data centres behind Singapore and South Korea.

Siu said compared to Hong Kong, Singapore has far more favourable policies for data centre providers to set up shop there, but added that Hong Kong has stepped up its game in the last five years.

The Hong Kong government has earmarked land for data centres in Tseung Kwan O, but there is no clear timetable to develop this land.

“The city is also running out of old factory buildings and warehouses to convert into data centres,” Siu said. “The main hurdle for Hong Kong is still shortage of land and the cost of setting up shop in Hong Kong is higher than in many other places.”