Equinix injects US$63m into second Hong Kong data center
By Sheila Lam 11-Nov-2011
Despite the shortage of land supply for data centers, Equinix has managed to secure a site and opened its second data center dubbed HK2 in Hong Kong on Wednesday.
With an investment of US$63 million, HK2 is a two-phase project, said Alex Tam managing director of Equinix Greater China. While the first phase (pictured) is yesterday’s newly opened 36,000 sq ft facility in Tsuen Wan that can house 450 cabinets, the second phase -- also located in Tsuen Wan and 250 meters away -- will provide an additional 1,000 cabinets and is expected to complete by mid-2012. Upon the completion, Equinix’s HK1 and HK2 are expected to provide a total of 3,450 cabinets locally.
Nevertheless, finding a site and repurposing it for data center business require 'lots of luck' and effort in Hong Kong, Tam noted.
“The biggest challenge in Hong Kong is to find a good site for data centers,” he said. “Even when there's land available for commercial user, property owners might not prefer to provide a long lease to service providers like us.”
Tam said Equinix was lucky to find sites and landlords who were willing to convert their warehouses into data centers.
Seeking approvals for property remodeling from different government departments was also a time-consuming process, he added.
“Not all government departments understand the data center business and its requirements from the property," said Tam. "We put much effort in explaining our needs and coordinating with those government departments."
“We hope the Data Center Facilitation Unit [from OGCIO] will help liaise with all these government departments, addressing different concerns,” he noted.
Finance sector drives DC demand
According to Tam, the company's aggressive expansion plan in Hong Kong is backed by the increasing demand of sophisticated data centers and criticality of IT infrastructure among enterprises, especially in the financial sector.
“Over 50% of our customers in Hong Kong are financial institutes,” he said. “Hong Kong is a major financial hub. Major financial institutes, looking to tab on the rapidly growing Asia market, are expanding their operations here.”
Tam remained confident despite the economic uncertainty brought by the financial and economic situation in Europe.
"“For many financial institutions, they still need to run their businesses. If they expect the market potential and opportunities are limited in Europe, they will focus more on their development in Asia Pacific,” he said. “Even if there were a crisis, eventually the market will come back. It’ll take about a year or two, as APAC will remain as a growth market."