Data centre demand may pick up in the medium term as foreigners come back

CBRE report showed vacancy rates in Hong Kong dropped.

The demand for data centres may have softened but it will likely improve as Chinese and foreign firms return, CBRE’s latest report showed.

Based on a 250-500 kilowatt (kW) per month requirement without electricity cost, the current global supply shortage resulted in a significant increase in data centre capacity prices. 

As a result, Singapore is the most expensive markets worldwide, with prices exceeding $2,340.57 (US$300) per month whilst Tokyo prices have remained relatively stable at around ($1,560) US$200 per month.

Due to its comprehensive network infrastructure and positioning of a mature economic hub next to China, Hong Kong is one of the Tier 1 data centre markets in the region, said Samuel Lai, Executive Director, Head of Advisory & Transaction Services – Industrial & Logistics, CBRE Hong Kong.

Vacancy rates fell as robust demand outstrips supply growth. Low supply, construction delays, and power challenges are hitting all markets, and large occupiers are finding it difficult to look for enough data centre capacity. 

For example, vacancy in Hong Kong has cut by 1.5% to 2% year-over-year. The pipeline in Hong Kong is attributed to redevelopment or renovation of older industrial buildings with the government’s potential plan to introduce new land supply in the medium-term for data centre development.