Hong Kong has once again demonstrated its status as a leading data center hub on a global scale. According to the latest Global Data Center Market Comparison report by Cushman & Wakefield, the vibrant city-state has risen to fourth place in the overall rankings, reinforcing its status as a top contender in the field of data infrastructure.
The annual report meticulously assesses major data center markets around the world using 13 weighted categories. These categories include important considerations such as market size, fiber connectivity, power costs, and environmental risk. By scrutinizing these parameters, the report identifies the world's leading markets, shedding light on their strengths and growth trends.
Hong Kong's rise through the rankings can be attributed to a variety of factors. With strong connectivity, sustained demand, a plethora of cloud services, and a business-friendly tax structure, the city has managed to overcome challenges such as high land prices. This strategic combination of advantages has propelled Hong Kong from sixth place in the 2022 rankings to its current top quartile position.
John Siu, Managing Director of Cushman & Wakefield in Hong Kong, remarked on the city's burgeoning prominence, stating, “Hong Kong is one of Asia’s leading and still-rising strategic locations for data centers, reflected in its move up in the overall global rankings to fourth place in the 2023 report. On the ground, Cushman & Wakefield Hong Kong recently advised pan-Asia data center operator, BDx, to pre-lease the majority area of the 38 Wing Kei Road building in Kwai Chung, as their third data center location in Hong Kong. The transaction further demonstrates the global demand and market confidence in Hong Kong’s data center market by multinational players. We anticipate the data center segment will continue to grow as the city continues to expand and develop its innovation and technology industry in the upcoming years.”
Hong Kong and Singapore Stand Tall Among Global Data Center Titans
Notably, Hong Kong and Singapore are the only two metropolitan areas outside of the United States to have achieved top-ten overall rankings. Singapore, ranking third globally, excelled across key categories such as market size, fiber connectivity, and cloud availability.
In the United States, Northern Virginia, long hailed as the largest data center market globally, shared the top rank with Portland in the latest report. Surging land prices and development constraints in Northern Virginia led to this unprecedented tie, with Portland rising from 10th place in 2022 to claim joint supremacy. Other American hubs like Atlanta, Chicago, and Silicon Valley also secured positions in the rankings.
Todd Olson, Head of Asia Pacific Data Centre Practice Group at Cushman & Wakefield, emphasized the expanding footprint of hyperscale tenants and the increasing interest in secondary markets offering favorable land and power dynamics. He anticipates significant advancements in secondary markets' rankings in the coming years, signifying a broader trend toward diversification and expansion.
Continued Growth in Hong Kong's Data Center Market
The most recent analysis of the Hong Kong data center market has revealed an expected surge in market size, with a projected increase from USD 2.67 billion in 2023 to USD 5.28 billion by 2028. With a projected CAGR of 14.60% over the forecast period, the region's significant growth highlights its position as a key player in the Asia-Pacific data center landscape.
Recent investments have increased the availability of data centers in Hong Kong, attracting global investors due to the region's competitive tax policies, low energy costs, strong connectivity, and favorable climate.
The market's dynamism is characterized by the presence of top-tier cloud and hosting service providers establishing operations, resulting in a dense infrastructure of 42 colocation facilities, 29 cloud nodes, 13 internet exchanges (IX), and ten DRBC sites.
As a key international finance and trading hub, Hong Kong's demand for high-quality data storage and management services is increasing significantly. The presence of numerous multinational corporations in the city, as well as its strategic proximity to Mainland China, have consequently resulted in a significant impact.
As technology continues to reshape industries and redefine connectivity, the role of data centers as the foundation of digital infrastructure grows increasingly important. Hong Kong's significant improvement demonstrates its resilience, adaptability, and unwavering commitment to promoting global innovation and technological advancement.
