Singapore-based Mapletree Investments on Friday announced that a Hong Kong industrial site which it acquired last month is set to become the latest addition to its growing portfolio of data centres.
“We are excited about winning this development land parcel,” said Wong Mun Hoong, Mapletree’s regional chief executive for Australia and North Asia. “Long-term macro drivers such as growing cloud computing, e-commerce as well as the impending 5G network, are expected to drive demand for data centres.”
Mapletree’s first data centre development in Hong Kong promises up to 50 megavolt-amperes of server-driving capacity. The company, which has previously sold data centre projects in Asia to US giant Equinix, as well as to China’s GDS, said that the project in the New Territories’ Fanling area could be leased to an end-user or a data centre operator upon the project’s scheduled completion in 2023.
With the COVID-19 pandemic having boosted use of cloud services and further accelerated Asia’s turn to e-commerce, data centres have become some of the most sought after real estates assets among institutional investors.
Located at the junction of On Lok Mun Street, On Chuen Street and On Kui Street, Fanling Sheung Shui Town Lot No. 268 provides Mapletree with a 4,000 square metre (43,056 square foot) site which can be developed into a maximum gross floor area of 20,140 square metres, the Temasek-owned firm said in a release.
In the Lands Department tender last month Mapletree agreed to pay HK$813 million ($104.9 million) for the property, topping seven other bids which ranged from HK$261 million to HK$704.5 million.
The site in Fanling Sheung Shui Town is about 6 kilometres (3.7 miles) from Luohu district in Shenzhen, just north of New Territories, providing good connectivity for Chinese cloud players based in the neighbouring city.
Also nearby are two interconnection points, Man Kam To and Lok Ma Chau, enabling the project to provide strong network connectivity to key cities in mainland China for fast and reliable cross-border communications.
Wong said Hong Kong stands out as an attractive location for data centres because of the city’s advanced telecom infrastructure, reliable power supply at a reasonable cost, limited climate risk and strong demand from local corporations for cloud services.
Aside from the data centre site, Mapletree’s Hong Kong portfolio includes the Festival Walk retail and office property held by Mapletree North Asia Commercial Trust and nine logistics properties held by Mapletree Logistics Trust.
Hong Kong investments dominated Asia Pacific’s data centre market in 2020, accounting for 54 percent of the nearly $1.5 billion committed regionwide in the first eight months of the year, according to research by Cushman & Wakefield.
Last July, US-based REIT Digital Realty announced that it would start development of its second data centre in Hong Kong, a 21,000 square metre, 24-megawatt facility to be completed in mid-2021.
That same month, a subsidiary of China Mobile agreed to pay HK$5.6 billion to secure 50-year land use rights for a New Territories parcel expected to become a data centre facility.
In December, Australia’s AirTrunk made its Asia operational debut with the power-up of a 20-megawatt data centre in a converted eight-storey industrial building in New Territories, launching its first Singapore data facility on the same day.
Mapletree Industrial Trust, a Singapore-listed REIT managed by Mapletree, struck gold in August last year by agreeing to sell the S3 data centre in Singapore’s One-North technology park to US player Equinix for the equivalent of $91.35 million.
A year earlier, Mapletree Logistics Trust had sold a warehouse in Shanghai’s Waigaoqiao Free Trade Zone to GDS for the equivalent of $47 million, with the mainland data centre developer quickly converting that project for data centre use.