Hong Kong has the potential to develop into Asia's leading data center as the city enjoys many competitive edges compared with other places in the region, according to a report by an international property consultant company.

In its latest global research released by Cushman & Wakefield on Monday, the city tops the Asia Pacific region in terms of housing data centers for global IT giants given its world-class infrastructural development as well as advanced soft environment.

The city's nine submarine communication cable systems and 17 land cable systems join Hong Kong's advanced telecom network with the world seamlessly, the report noted.

The natural-hazard-free environment as well as stable power supply also guaranteed the safety of data centers located in the city, according to the report, which added that the city's highly developed transportation networks enable a smooth ride between the data centers and the company's head offices - which are generally located within 20 kilometers - assuring a company to solve any technical issues within a short period.

Hong Kong is also regarded as one of the most friendly business environments in the world, where information flows freely without any censorship regime. The city's some 73,000 professionals as well as an annually 2,300 graduate students who major in information and technology also guarantees sufficient talents supply in Hong Kong, said John Siu, executive director of Cushman & Wakefield Hong Kong.

As a regional financial center, Hong Kong serves as a springboard for institutions and multinationals entering the mainland market. Since multinational financial institutions usually locate their data centers and regional headquarters in the same place, data centers' demands in Hong Kong are continually on the uptrend over the years, Siu told at a media briefing on Monday.

In August alone, datacenter providers Equinix, Digital Realty Trust, cloud service company Savvis as well as China's largest mobile operator China Mobile announced their datacenter development plans in Hong Kong.

Search engine giant Google also announced last year said it will spend $300 million to build a data center in Hong Kong, which is also one of its first three data centers that Google plans to open in the region.

China Mobile and Google will both establish centers in the Tseung Kwan O Industrial Area, where the Hong Kong government has set aside over 10 hectares of lands in the past two years to cater to data center developments' demand.

However, current land available for development in the area is only 1 hectare, which is not able to meet the growing demand for space in the area, according to Siu.

"Hong Kong government should launch more sites specifically for data center use in the city. Apart from expanding the Tseung Kwan O area, the government could also consider putting land plots on Hong Kong Island, in Sha Tin, Tai Po, Kwai Chung, Tsing Yi and Tsuen Wan up for sale, so that the industry can diversify locations of data centers and mitigate the risks involved," said Siu.

Data center development will also facilitate the conversion of industrial buildings in the city, Siu added. Compared with converting these industrial places into warehouses, rental generated from data centers are normally 50 percent to 100 percent higher than these warehouses. At the same time, the leasing periods of data centers always tend to be longer, which normally stands at five to 10 years, or even up to 20 years, said Siu.

litao@chinadailyhk.com

(HK Edition 09/18/2012 page2)