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Hong Kong rejoins the top 10 global data centre markets, ranking second in Asia Pacific

By Ryan Morris-Reade
Tue 25 Jan 2022

The Asia Pacific data center market continues to grow at a relentless pace. It is set to become the world's largest data center region over the next decade, according to Cushman & Wakefield.

In the global commercial real estate services firm's latest 2022 Data Center Global Market Comparison report, Hong Kong, Singapore, and Sydney are ranked among the world's top 10 data center markets.

The report found construction totals continue to grow globally, with 4.1 gigawatts (GW) currently underway in the markets covered, up from 2.9 GW in the previous study and 1.6 GW in the year before. The company says the largest clients require larger builds, with 100-megawatt campuses becoming increasingly common.

Hong Kong was ranked outside the top 10 markets last year but made a big jump in 2022, coming in at sixth place globally and second in Asia-Pacific. 

"Hong Kong offers a robust development pipeline, excellent networks, and all major cloud services are available," says Cushman & Wakefield managing director, Hong Kong, John Siu.

"The city also retains its crown as the globally lowest taxed data center jurisdiction. As a global financial and business capital with a long history of pro-business policies, it accordingly offers a robust data center sector," he says.

"Strong demand from data center investors and operators have triggered a high volume of transactions in 2021. For example, Mapletree acquired an industrial site via a government tender for a ground-up data center development, ESR bought an industrial building for a wholesale data center conversion, and GDS also purchased an industrial building for a data center redevelopment. 

He says the city's total new supply will amount to NZD6.1 million in the next five years. But he says the supply pipeline will be constrained in the medium to long term by a shortage of land and power supply in the popular data center submarkets, such as Tsuen Wan and Kwai Chung. 

"To support the city's development as a world-class data center market, it is, therefore, crucial for the government and power suppliers to break the bottleneck and increase land supply and power capacity into these submarkets," he adds.

Shanghai retains its position as the world's fourth-largest data center market by total market size, with a market capability of more than 0.6 gigawatts surpassed only by Northern Virginia, London and Tokyo. Beijing was ranked 13th for the same indicator.

The Cushman & Wakefield report finds that further growth in Asia Pacific is expected throughout at least the next five to ten years as the region requires entirely new builds due to a lack of existing infrastructure for retrofit. Globally, regions across Latin America and Africa are also expected to enjoy considerable growth in coming years, as new undersea cables are bringing faster access to many markets for the first time. The report says secondary markets worldwide continue to grow, with many soon reaching the current primary market size.

"The horizon for the data center industry across the Asia Pacific region is exceptionally bright, thanks to deep hyperscale demand and the billions of dollars in development in progress to support these key tenants," says Cushman & Wakefield director of research, Data Center Advisory Group, Kevin Imboden. 

"The 1.3 gigawatts under construction in the APAC markets reviewed is a small fraction of what is in planning regionally, with much action and growth coming over the next decade."

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