HONG KONG DOMINATES AS APAC DATA CENTRE INVESTMENTS JUMP 56% IN 2020

A Global Switch facility in Hong Kong

Data centre investment in Asia-Pacific climbed to $5.7 billion (HK$44 billion) between 2018 and 2020, a seven-fold increase over the growth recorded over the previous two year interval, according to new research by Cushman & Wakefield in Hong Kong.


In the first eight months of 2020, and despite an ongoing public health crisis, nearly $1.5 billion was poured into data centres in APAC, up 56 percent over 2019. Investment into Hong Kong accounted for 54 percent of that total.

“The growing importance of Internet of Things (IoT) applications, the impending 5G network, and fast adoption rates of cloud computing as well as the post-COVID-19 ‘new’ normal are the four major factors driving the surge in demand for cloud storage,” said Cushman & Wakefield’s Associate Director of Research, Hong Kong, Eric Chong in a statement Monday.


CBRE agreed, placing Hong Kong in the middle of the pack among 23 APAC cities on its market recovery index, with Tokyo, Singapore and Sydney, in its Asia Pacific Real Estate Market Outlook 2020 Mid-Year Review. According to CBRE, data centres are currently considered Hong Kong’s prime investment assets (alongside core Grand A offices and logistics properties). Perhaps not surprisingly C&W singled out those same cities as prime data centre locations.


Hong Kong Rack Space Stays Tight
In the second quarter of 2020, Hong Kong had 7.9 million square feet of data centre stock, 80 percent of it controlled by just 10 operators, including SUNeVision and PCCW Solutions, together accounting for 31 percent of the market.

C&W Hong Kong boss John Siu (left) with research director Eric Chong

Representation from international operators, with Japan’s NTT Communications and UK-based Global Switch playing the biggest roles, is expected to increase in the short term due to pre-commitments, with 4.2 million square feet of new supply due in the next four years.


Among the international data centre platforms active in the city, however, all but US-based Equinix and OneAsia are owner-operators, with the dominance of both global and local investors investing in facilities for their own use potentially leaving little supply for third party tenants hoping to lease space or secure co-location services, according to C&W’s analysts.
“Despite a 50 percent increase over the existing 7.9 million square feet [of] stock, supply will remain tight as 82 percent of the upcoming developments have already been taken up by owner-operators and tenant operators,” explained Chong.


International Players Expand Footprints

In July, China Mobile made one of the city’s largest data centre investments of the year when it agreed to acquire a 789,000-square-foot (73,300 square metre) Fotan site for HK$5.6 billion. The mainland telecom giant paid a record-setting HK$5,967 per square foot for the New Territories data centre plot and outbid its most aggressive competitor by over 50 percent in the process, according to public records.


That tender set a price point nearly 25 percent higher than from previous data centre site benchmarks, including SUNeVision’s December 2018 purchase of a 1.2 million square foot parcel in Tseung Kwan O for HK$5.46 billion — a price equivalent to approximately HK$4,500 per square foot which set a record at the time.


In July, US data centre giant Digital Realty announced that it would begin work on its second facility in Hong Kong, adding a 24 megawatt carrier neutral facility in the Kwai Cung area to an existing property in Tseung Kwan O.


Infrastructure, Political Risks Cloud Local Outlook


Hong Kong holds appeal for data centre operators for its low taxes and utility costs, marginal climate risks, sufficient fibre connectivity (its server capacity increased to 379.6 MW in March) and market maturity. In addition the government incentivises data centre development by waiving land premiums for IT&T operators; with the China Mobile sale including such a clause. As expected, Hong Kong was received low marks for land costs in C&W’s data centre research report.


Hong Kong’s data centre tenants are currently dominated by finance, insurance, real estate and business services firms (with 90 percent of these FIREBS occupiers using cloud systems) and telecom operators, though global cloud services providers such as Microsoft Azure, Google Cloud, and Alibaba Cloud, are likely to be the major drivers in the future.


But one disadvantage to data centre investment in Hong Kong is the city’s current power supply, which falls short of the demands of forthcoming hyperscale data centres. It can take up to four years to install new power infrastructure, and that needs to get faster if the city expects to keep pace with regional neighbours theorised C&W.


In addition, international operators could be reduced in the long term by concerns over the National Security Law imposed on Hong Kong in July, although Cushman’s team indicated that data centre investors, so far this year, seem unperturbed by changes in the political climate.


“In recent months, we have continued to see strong interest from international investors exploring opportunities in the Hong Kong data centre market,” C&W’s Hong Kong chief John Siu said. “Data centre operators are also aggressively pursuing leasing and purchasing opportunities to meet the strong demand for rack spaces from enterprises.”

中文:

調查顯示,亞太區的數據中心投入在2018至2020年間上升至57億美元,折合約440億港元,比兩年前增加了七倍。

儘管受新冠肺炎影響持續,2020年首8個月,亞太區數據中心投資仍近15億美元,比去年提升百分之56。其中香港佔比達54%。

業界表示,隨著物聯網、5G網絡以及雲計算在新冠肺炎疫情后的寬範應用都推動,雲儲存進一步發展。据調查,香港在23個亞太區城市中,市場復蘇中位數居首位,東京,新加披和悉尼亦在其中。數據中心被視爲香港主要的資產投資。

香港伺服器機架空間有限

2020年第二季,香港數據中心庫存量達790萬平方呎,八成由SUNeVision 和PCCW等十間公司負責運營,占據百分之31市場份額。未來將引入國際營運商,例如日本NTT與英國Global Switch,并在未來4年增加約420萬平方呎的機架空間。

在香港幾家主要的運營商中,除了兩家美國公司,其他都自己運作機房,有分析師希望這些在全球及本地市場佔據主導地位的服務商,能為其他空間租賃公司提供安全及穩定的服務。

資料顯示,儘管伺服器空間有5成的增長幅度,但其中約百分之82 將被服務商及租賃公司佔用。

國際運營商拓展

中國移動在今年7月,斥資56億港元收購位於火炭的一間數據中心,佔地約七十八萬九千平方呎,創今年截至目前,最大一單數據中心投資案例。作爲中國内地電信巨頭,中移動收購的這間數據中心創下平均呎價約5,967港元的紀錄,超過競爭對手百分之50以上。

本次投標價格再創新高,溢價近百分之25,SUNeVision曾在2018年12月耗資54.6億港元,購下將軍澳一處佔地120萬平均呎地皮,平均呎價約4,500港元,為當時的最高紀錄。

基礎設施、政治風險、發展前景

香港以低稅收、公共設施完善、氣候、充足的帶寬(三月伺服器容量增至379.6兆瓦)以及市場成熟度吸引運營商。此外,政府通過減免運營商投拍的土地溢價,以鼓勵發展數據中心,在與中國移動交易的過程中也包含此類條款。

目前,香港的數據中心主要被金融、保險、房地產和商業服務公司等機構租用,但未來國際企業,例如:微軟,Google雲,阿里雲等將成爲主要驅動力。

但在香港本地電力供應不足,對未來大型數據中心發展產生限制,即便由現在還是升級相關電力設施,仍要四年時間。如果港府希望未來能與周邊地區及國家競爭,需進一步加快步伐。

雖然截至目前,國際運營商尚未受政治環境衝擊,但對今年7月實施的《港區國安法》心存疑慮。

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