Vantage's OnLock facility in the Fenling district of northern Hong Kong
Just over a month after Hong Kong passed a new national security law that prohibits the illegal acquisition, possession, and disclosure of information deemed to be state secrets, one of the largest data center operators in the United States is closing down its facilities in the city. We are considering selling.
Denver-based hyperscale provider Vantage Data Centers is acquiring facilities from Hong Kong carrier PCCW, according to multiple market sources who confirmed the Bloomberg report and spoke to Minty Andy on Friday. In less than three years, the company has purchased four data centers in Hong Kong.
The facility is estimated to be worth between $300 million and $500 million, prompting regulators around the world to launch investigations into data center operators over “data sovereignty” issues and global investors on alert. Meanwhile, Vantage, a division of US private equity firm Digital Bridge, will begin sales activities. Regarding information control in Hong Kong.
CBRE said in a report last year comparing global digital infrastructure markets that “heightened geopolitical concerns are making Western companies reluctant to set up or expand data centers (in Hong Kong),” and Vantage's He said some of its competitors have already shifted capacity from Hong Kong. territory of China.
Growth in Asia, contraction in Hong Kong
The sale activity is said to be in its early stages, and Vantage and DigitalBridge have not yet responded to inquiries from Mingtiandi at the time of publication.
Sureel Choksi, Vantage Data Centers CEO
The four data centers have a combined capacity of 35 megawatts (MW), and Vantage owns and operates the facilities independently of the underlying real estate. DigitalBridge acquired assets as part of a $750 million deal in July 2021, just one month after the company changed its name from Colony Capital to reflect its shift from a real estate strategy to an infrastructure strategy. I had obtained it.
The three-year-old deal included nine data centers across Hong Kong, mainland China and Malaysia, with a capacity of 75MW at the time. As of the beginning of this year, Vantage ranked as the 19th largest data center operator in the world, according to research by industry website Dgtl Infra, by number of facilities, power committed (in megawatts), portfolio size (in operating square feet), and factors such as cloud or colocation revenue (USD).
Vantage's website currently lists four Hong Kong assets within its Asia Pacific portfolio, all of which are located in the New Territories. These include his 14MW facility in Fortan, another of his 14MW assets in Kwai Chung, and his two data centers in Onlok with a total capacity of 7MW, with the four assets having a total floor space of 613,000 square feet ( 56,950 square meters).
The Hong Kong assets will help Vantage strengthen its Asia-Pacific operations, with two senior executives appointed to Asia-Pacific, including Raymond Tong, former chief executive officer of Hong Kong-based data center operator SUNeVision Holdings. It's up for sale five months after ramping up hiring. The President will oversee the company's strategy, expansion and operations in the region.
Within the Asia-Pacific region, Vantage is earmarking $3 billion for the development of a new 256MW campus in Cyberjaya adjacent to its existing Cyberjaya campus, which will be expanded to accommodate 31MW of capacity.
The company is also developing a 56MW campus in Ibaraki, near Osaka, a 48MW campus in Melbourne, and a 16MW facility in Taipei.
Data sovereignty concerns grow
With governments being the top users of data centers and many countries introducing regulations on where consumer and business data is stored, concerns about keeping information within their borders are growing globally.
In late 2022, Amazon Web Services, the world's largest data center operator, announced that they will be making these changes by issuing the AWS Digital Sovereignty Pledge, which guarantees that users of its cloud services control the location of the servers that hold their data. I acknowledged my concerns.
In Asia Pacific, Macquarie Data Centers has acquired two Keppel DC REIT-owned facilities at the Macquarie Park Data Center campus in Sydney, highlighting the need to meet the expectations of its customer base. “We value Australian ownership and data security” and sovereign credentials. ”
Hong Kong has been subject to the Mainland China Security Act covering the region since 2020, and a survey released in January by the American Chamber of Commerce in Hong Kong found that 31% of U.S. business representatives disapproved of the law. Regarding activities within the city that respondents said were having a negative impact.
A new law passed last month states that “the acquisition and possession of non-public information that could endanger national security, including information about policy-making, defence, international relations, economic and social development of a city or country” , or disclosure. [China]technological development and science,” analysts are concerned about the breadth of the ban.
Other international data center operators have already moved operations out of Hong Kong, including regional company BDx, which will move its headquarters to Singapore in 2022.
