Australian data centre launches first facility in Hong Kong

A 10-year lease was signed by AirTrunk for an industrial building in Tsing Yi, providing services to major cloud service providers

Server room center exchanging cyber datas and connections. sdecoret/Shutterstock

AirTrunk, an Australian data centre operator, launched a branch in Hong Kong, answering to the shift towards cloud computing as many companies look to improve online user experience and assist social distancing due to the COVID-19 pandemic.

According to the South China Morning Post, the company has signed a 10-year lease for an industrial building in Tsing Yi, which is an eight-storey property with 17,400 square metres (187,292 square feet) of floor area. Despite concealing rental rate, property agents estimated the rent to be around HKD4.2 million (USD542,000) per month, based on the report of market rates.

Robin Khuda, CEO and founder of Sydney-based AirTrunk, said “we have had a record year in terms of the number of leases signed.”

Prior to the pandemic, many companies were hesitant about transitioning to cloud computing, but things are looking different. Khuda added, “COVID-19 left them no choice but to move from in-house to cloud as many companies are now in remote working mode.”

As Hong Kong enters its fourth coronavirus wave, many firms are scheduling work from home arrangements. The city’s largest employers like HSBC and Standard Chartered are considering more flexible working schedules and digitising its operations.

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The growth potential and increasing demand for data centres are attracting investors and convincing landlords to transform their premises for such operations.

“When I first looked for sites in Hong Kong in 2015, landlords told me that they do not want to lease their property to a data centre because they were not sure what [kind of business] we were and whether we would be able to pay rent,” stated Khuda.

Humbert Pang, managing principal of Hong Kong-based Gaw Capital Partners said, “amid the backdrop of the pandemic and rapid adoption of 5G in China, there is a strong demand for data processing services due to the increasing use of data because of the social distancing measures.”

JLL evaluates Hong Kong to be the third-largest data centre in the region following Tokyo and Singapore with a capacity of 285MW.

In order to fulfil Hong Kong’s aspirations in becoming the region’s data centre hub, the city still needs to clear up the insufficient buildings and land plots to accommodate these operations.

Khuda commented, “the biggest challenge here still is expensive land.”