The Hong Kong data centre market is showing signs of a healthy rebound coming out of the pandemic period as covid-related travel restrictions and lockdowns ease and the market climbs its way back to its pre-covid levels of business activity. In 2023, this market is projected to be worth USD $2.1 billion and projected to reach $3.2 billion by 2028. The projected five-year CAGR for 2023-2028 is 9.0%.
Like many leading markets worldwide, Hong Kong has seen significant demand from hyperscale cloud companies and this trend is expected to continue moving forward.
A number of the leading hyperscale platforms are based in the US and geopolitical tensions have shown signs of easing and this is a bullish sign that will likely influence decision-making for digital infrastructure spend in the year ahead. The primary cause for concern during the pandemic period was that Western hyperscale companies would migrate their data centre infrastructure out of Hong Kong and that theory has not played out practically over the last two years. Instead, hyperscale builds have continued to ramp up, and existing deployments have stayed put. This proves that an entire ecosystem of connectivity, traversing key landing points and exchanges, is not going to be easily lifted and shifted and Hong Kong appears to have retained its long-term strategic importance.
Structure Research expects there is still going to be a steady stream of hyperscale-grade demand for colocation capacity as Hong Kong will increasingly be used as a jumping-off point out of China. And we have already started to see this with the top tier of China-based clouds like Alibaba and Huawei, followed by the leading Chinese telcos. A second tier of public cloud, content, and social media platforms, is set to expand outside of China and Hong Kong will be the logical springboard.
Hong Kong remains to be a difficult market for large hyperscale cloud companies to build their own data centres in. These hyperscale companies would rely on local data centers that have the ability to manage the entire data centre development process from land acquisition, development, colocation leasing, and ongoing operations. Data centre infrastructure demand is going to increasingly come from hyperscale companies and this ensures the long-term viability of the market even as the demand profile starts to transition.
Colocation customers require a path to expand and scale their data centre infrastructure deployments over time as internet and cloud adoption across the APAC region is projected to accelerate over the next five years. Hong Kong has proven to be a relatively challenging market to navigate especially for hyperscalers who do not have local knowledge and expertise.
This report takes an in-depth look at the Hong Kong colocation and interconnection market. We track the market’s size and rate of growth while drilling into the inventory situation and demand profile. A complete picture of demand, supply, and absorption is provided, along with a detailed mapping of cloud infrastructure and interconnection nodes across the market. New and planned builds are tracked and accounted for so that the current and maximum built-out capacity is measured.
This report is an excellent resource for any operator, investor, or end user (service provider or enterprise) that is looking to understand and project the data centre market in Hong Kong or find a service provider.