Hong Kong data centre market to see gradual recovery over the next 6-12 months

The market remained stable and has yet to show momentum.

According to a Cushman and Wakefield report, Hong Kong’s data centre market, with an established capacity of approximately 600MW, remained broadly stable over H1 2025. Overall colocation vacancy in the city edged down to 19%, from 21% in H2 2024, primarily driven by the commitment of a major cloud service provider in Tseung Kwan O.

“While the market has yet to show robust momentum, a gradual recovery is anticipated over the next 6 to 12 months. Demand for data centres continues to be driven by the Banking & Financial Services and Telecom sectors, both of which are showing steady growth,” the report added.

Here’s more from Cushman and Wakefield:

Investor sentiment remains cautiously optimistic, as reflected in several key announcements during H1 2025. In June, Grand Ming Group divested two data centre assets in Fanling for approximately US$275 million, making Hong Kong’s first data centre sales transaction since 2022. Bain Capital is understood to be the purchaser.

Meanwhile, the Goodman Group launched a dedicated US$2.7billion investment platform – the Goodman Hong Kong Data centre Partnership (GHKDC) – focused exclusively on the city’s data centre market. This move signals long-term confidence in Hong Kong’s strategic relevance. BDx also secured project financing from a consortium comprising Clifford Capital, UOB, and SMBC for its first hyperscale data centre in Kwai Chung.

Looking ahead, amid the new phase in AI development, although Hong Kong data centres are not directly involved in AI model training, the market will stand to benefit over the medium term as cloud and AI adoption accelerates. Cost efficiencies from new models will drive enterprise usage, boosting demand for low-latency inference hosting in metro locations.

Hong Kong’s robust subsea cable infrastructure will be further enhanced with the addition of four new cables – Asia Link Cable (ALC), Cambodia-Hong Kong, SEA-H2X, and Southeast Asia-Japan Cable 2 (SJC2) – set to become operational between H2 2025 and 2026. These upgrades will significantly improve regional connectivity and reinforce Hong Kong’s role as a digital gateway.

In a move aligned with its Climate Action Plan 2050, the Hong Kong Government has amended the Buildings Energy Efficiency Bill to include data centres, effective August 2025. Under the revised legislation, operators will be required to conduct periodic energy audits and report Power Usage Effectiveness (PUE) metrics. This regulatory shift will improve buildings’ energy efficiency and reduce carbon emissions, promoting sustainability in the sector.