Limited supply and AI demand shape Hong Kong data centre outlook
Tightening availability may enable rental growth from 2H 2026 and favour modern, AI-ready facilities, while power constraints and retrofit costs could limit industrial-building conversions.
Hong Kong data-centre vacancy is expected to ease over the next 12 to 18 months as limited new supply meets sustained leasing and AI-related demand.
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Vacancy is expected to ease over the next 12 to 18 months as new supply remains limited.
Hong Kong's data centre market is seeing stronger leasing demand, while limited near-term supply and rising demand for AI-ready capacity are shaping the outlook, according to CBRE.
CBRE said leasing demand continues to strengthen, driven mainly by hyperscalers, Chinese technology and e-commerce companies, and financial institutions. Multinational banks and financial institutions are also increasingly supported by stricter compliance and operational resilience requirements.
Supply is expected to remain tight despite the recent completion of an exceptional supply cycle. CBRE expects vacancy to continue easing over the next 12 to 18 months, supported by limited new supply and sustained leasing demand. Newer facilities typically report vacancy of 10% to 15%, compared with older stock, which faces higher vacancy and weaker efficiency because of rising power and operating costs.
The near-term development pipeline remains modest and concentrated in existing clusters including Kai Chuang and Tseung Kwan O. Longer term, the Sandy Ridge Data Facility Cluster in the Northern Metropolis is expected to provide about 250,000 square metres of gross floor area, with operations scheduled to commence from 2029.
Investment activity remains limited, reflecting broader capital market conditions and a shortage of stabilised data centres available for sale. CBRE noted that investor interest is focused primarily on conversion opportunities involving existing industrial buildings, although constrained power capacity, high retrofit costs and extended delivery timelines continue to restrict activity.
One major transaction highlighted by CBRE was Goodman Group's establishment of a US$2.7 billion Goodman Hong Kong Data Centre Partnership, initially comprising six data centres offering more than 180MW of capacity, backed by pension and infrastructure investors. China Mobile has also launched its Global Intelligence Centre in Fo Tan, a 10MW facility designed to support high-performance computing and AI workloads.
CBRE said rents have been tenant-friendly following the recent supply surge, although rental growth is likely to resume from the second half of 2026 as vacancy tightens. At the same time, Hong Kong's existing data centre stock is not well suited to high-density AI workloads: most facilities are designed for about 5-15kW per rack, versus requirements of 40kW or more for AI-driven workloads.
As of the first quarter of 2026, CBRE puts Hong Kong's total data centre capacity at 687MW, with 653MW of upcoming capacity. Colocation prices were rising and vacancy was declining, while the indicative cap rate stood at 5.00%-6.00%.