SUNeVision Holdings, a subsidiary of property giant Sun Hung Kai Properties, has won the tender for a data centre site in Hong Kong’s Tseung Kwan O district for HK$5.456 billion ($700 million), outbidding six other developers.
An announcement by the Hong Kong Lands Department this past week said the 27,444 square metre (295,404 square foot) plot at 131 Wan Po Road, Tseung Kwan O, was awarded to Easy Vision Development, an affiliate of SUNeVision Holdings, which is Sun Hung Kai’s technology development and service unit.
SUNeVision paid around HK$4,500 per square foot for the acquisition, or about 45 percent higher than the HK$3,100 that industry experts had predicted would win the site.. To win the bid, SUNeVision bested eight other companies, including subsidiaries of six other developers — Legan Development, Grand Ming Group Holdings, Mapletree Investments, Far East Consortium International, Sino Land Company, and TKO Investment.
A Neighborhood of Data Centres
The plot is adjacent to SUNeVision’s MEGA Plus data centre, which was opened in 2017 and built on the first parcel of land the Hong Kong government released for dedicated data centre development in Tseung Kwan O in 2013. SUNeVision established its first data centre in Hong Kong in 2000 and now owns a total of four data centres around the city.
The new data centre site is located to the east of the Lohas Park residential development, and is around a nine-minute walk from the MTR Lohas Park Station on the Tseung Kwan O line. According to government documents, SUNeVision’s latest acquisition has been approved for a maximum construction area of 112,640 square metres, which will be used to house computer systems, servers, and telecommunication equipment.
Four Times the Price of 2013 Bid
SUNeVision’s winning bid for this latest site dwarfed the price it paid for the MEGA Plus land plot in 2013, in terms of cost per square foot. That parcel cost the company the bargain-basement price of just HK$428 million, or HK$904 per square foot — about a fifth the price of its latest land plot.
Kwok Kong Tong, SUNeVision’s CEO, said that even though the company paid well above the minimum auction price for the plot, the final sum was a “reasonable” amount given the company’s optimism about the future of the local data centre market.
“The Tseung Kwan O data centre site will be synergistic with the adjacent MEGA Plus centre, and other MEGA Campus data centers, such as MEGA-i in Chai Wan and MEGA-Two in Fo Tan,” Tong said. “The latest acquisition is to further enhance our leadership role in the market.”
Data centres have become profitable businesses for developers and investment companies in Hong Kong in recent years. In August, PAG sold its data centre in the industrial district of Kwai Chung, making a profit of HK$600 million after holding the property for less than three years.