How To Build A Data Centre In Hong Kong

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1 in hong kong WHERE?

2 Introduction The ever increasing amount of data transferred and stored as a result of the exponential increase in the speed and reach of the Internet has an often forgotten property impact. Whilst we conceptualise the storage of this data is in the so-called cloud, each bit of data stored requires physical space. According to Internet World Stats, the number of Internet users has increased five-fold from 2000 to The advances in Internet technology and its wide adoption have changed business operations and our daily lives. Fax has gone from the primary means of business communication in the early 1990s to being virtually redundant today, as and other, now ubiquitous, instant messaging tools become the preferred channels for business and personal communication. The latest wave of cloud computing technology requires faster networks for delivering services to the end user. This increase in speed means more and more data is being transferred every second. This data is more and more frequently not stored at the owners premises. The demand for appropriate buildings to house this data is increasing at an accelerating rate and is likely to explode as we all adopt the cloud for storage of information. According to a study commissioned by the government, the majority of data centre operators and end users prefer to locate their primary data centre operations in Hong Kong, largely as a result of its inherent location advantages. However, the report noted a lack of Greenfield sites or suitable premises to accommodate the real estate needs of data centre operators. In this white paper, we will look into the latest government measures for facilitating data centre development in Hong Kong and the possible options for accommodating the data centre operators real estate requirements. 2

3 Demand for data centres Expanding the Internet user base globally Growing demand from the financial industry Mobile entertainment gaining importance Internet penetration in Asia Internet penetration in Hong Kong Internet data traffic volume 4 DAta centre hubs in Asia Distribution of data centres in Hong Kong Locations of existing facilities Space requirements of data centres 10 Where are the suitable locations? Traditional industrial core or emerging areas Urban and suburban locations 12 Content 14 Revitalisation of industrial buildings 16 Key challenges for operators 17 Market outlook Appendix 18

4 1 Data Demand for Centres Development of Data Centres With the continued development of information and computer technology and the increasing popularity of mainframe computers, there has been an increasing real estate requirement for the storage of a range of computer-related hardware equipment. In the commercial sector, stand-alone storage on site is obviously the immediate solution particularly for small to medium-size enterprises. However, given the growing popularity of mainframe computers and the ever-expanding volume of data storage and transmission, off-site storage and outsourincg to third-party managers have gradually been accepted by many corporations and end users in terms of cost and operational efficiency, thus supporting the growth of the so-called Data Centres in the business sector. The following highlights the key advantages from the perspective of end users. Cost considerations Due to the development of the banking and finance industries, the average office cost has been surging. In Hong Kong, the average rent in the CBD locations has risen to HK$100 per sq ft per month or above, thus making the storage of a range of computer facilities on site increasingly expensive. Outsourcing all of these storage requirements to third-party managers or relocating and consolidating computer hardware to decentralised locations is therefore more cost-effective. As an example, the real estate rental cost in parts of the New Territories is in the order of HK$10-15 per sq ft per month, representing about 10-15% of the cost in the traditional CBD locations. Technical requirements Data centres have several requirements regarding slab floor height, raised floor, electricity, telecommunications network accessibility, etc. As a result, only specially designed spaces are suitable for accommodating a data centre. IT expertise IT expertise is required to maintain the mainframes and the data centre could leverage its IT knowledge advantage to reduce the labour cost of a company. Hong Kong has a pool of agile, skilled and multi-lingual information and communications technologies (ICT) professionals. According to the government, there are over 73,000 ICT professionals engaged in various business sectors. Besides, the higher education institutions produce over 2,300 ICT graduates every year. 4

5 data centre in hong kong - where? Demand Drivers Increasing number of Internet users With the rapid development of information technology and its integration into our daily lives, the importance of data centres has been growing. Modern data centres play a critical role in supporting smooth operation of various online activities, such as e-shopping, online banking and mobile entertainment. The growing Internet user base has been one of the major driving forces of the demand for data centre services. According to Internet World Stats, the number of Internet users around the world increased five-fold over the past decade, from about 361 million in 2000 to 2,267 million in Meanwhile, the number of Internet users in Asia jumped from 114 million to 1,017 million during the same period. The proportion of Asian Internet users increased from 32% of world s total in 2000 to 45% as of the end of Global Internet Users distribution End of 2000 Africa 1% Middle East 1% Oceania / Australia 2% End of 2011 Africa 6% Middle East 3% Oceania / Australia 1% Latin America 5% Asia 32% Latin America 11% Asia 45% North America 30% North America 12% Europe 29% Europe 22% Source: Internet World Stats The proportion of Asian Internet users increased from 32% of world s total in 2000 to 45% as of the end of 2011

6 1 Data Demand for Centres Banking and finance industries According to a government survey conducted in 2009, the FIRE industry (i.e. finance, insurance, real estate and business services) has the highest Internet penetration rate among all industries; 80% of enterprises have Internet connections. There is growing reliance of financial industry operations on the Internet. For example, financial institutions require data centre services to provide online banking to their clients. Data centre bandwidth distributed to the financial community can be used as an indicator of demand for data centre services from the financial industry. According to NYSE Euronext, the estimated amount of data driven into the public network from one of its data centres reached 2.6 Terabits per second or about 333 Gigabytes per second in July 2011, which is about 29 times the data throughput in July INTERNET PENETRATION BY BUSINESS SECTOR Internet penetration by business sector 90% 80% 80% % of Population 70% 60% 50% 40% 65% 62% 54% 51% Average: 61% 37% 30% 20% 10% 0% Finance, insurance, real estate and business services Manufacturing, electricity and gas Wholesale, retail and import and export trades, restaurant and hotels Community, social and personal services Construction Transport, storage and communications Source: Census and Statistics Department, HKSAR Government BANDWIDTH DISTRIBUTED TO THE FINANCIAL COMMUNITY bandwith distribution to the financial community 3 T Terabits per second driven into the public (external) network from one data center 2 T 1 T 0 T Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 According to NYSE Euronext, the amount of data driven into the public network from one of its data centres increased 29 times over a five-year period ended in July 2011 Source: NYSE Euronext 6

7 data centre in hong kong - where? Mobile entertainment gaining importance application APPLICATION internet INTERNET traffic TRAFFIC volume VOLUMES by device BY type DEVICE TYPE 0% 20% 40% 60% 80% 100% Mobile PCs Tablets Smartphones Online Audio Online Video Web Browsing Social Networking File Sharing Software Others Download/Update Source: Ericsson spread SPREAD of monthly OF MONTHLY traffic TRAFFIC volume VOLUME in selected IN SELECTED 3g 3G mobile MOBILE broadband BROADBAND networks NETWORKS per subscriber, PER SUBSCRIBER, by device BY DEVICE GB/month/subscriber Mobile PCs Tablets Smartphones Source: Ericsson Mobile entertainment currently accounts for a significant portion of Internet traffic volume. According to a research report published by Ericsson in 2011, subscribers using mobile PCs generate the highest data traffic volume over 3G mobile broadband networks, in the range of about one to seven Gigabytes per month per subscriber, compared with less than one Gigabyte per month for tablet and smartphone users. Among the mobile Internet users, Online Video and Online Audio accounted for 30 to 40% of their data traffic. Data centres play an important role in providing smooth experiences to the online video viewers using mobile devices or fixed-line networks. 7

8 1 Data Demand for Centres Internet penetration rate in Asia The Asian Internet penetration rate, which corresponds to the percentage of total population in the region that uses the Internet, was relatively low in According to Internet World Stats, the penetration rate in Asia was 26.2%, compared to the global average of 32.7%. Hong Kong s Internet penetration rate was 68.7%, which was significantly higher than the average in Asia, ranking fifth in the region. Broadband Internet penetration in Hong Kong According to government statistics, Internet usage in Hong Kong is on the rise. In 2011, the number of fixed broadband Internet subscribers reached 2.2 million (31.6% penetration rate), increasing from 1.6 million (24.1% penetration) in Meanwhile, the number of mobile broadband Internet subscribers demonstrated much stronger growth from 0.6 million (9.3% penetration) in 2005 to 7.4 million (104.4% penetration) in Internet traffic volume With the growth of Internet users and the emerging online video access, the broadband traffic volume in Hong Kong surged from 0.01 Exabyte in 2001 to 1.0 Exabyte in The figure rose further to 1.9 Exabyte in INTERNET PENETRATION RATE IN ASIA 2011 internet penetration rate in asia 2011 % of Population 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 82.7% 80.0% 77.2% 70.0% 68.7% 61.7% 53.9% Asia Average: 26.2% South Korea Japan Singapore Taiwan Hong Kong Malaysia Macau China 38.4% Source: Internet World Stats number NUMBER of OF BROADBAND broadband INTERNET internet SUBSCRIBERS subscribers IN HONG in KONG hong kong Number of Subscribers (Million) Fixed Broadband Mobile Broadband Source: Office of the Telecommunications Authority, HKSAR Government The Hong Kong broadband traffic volume surged from 0.01 Exabyte in 2001 to 1.0 Exabyte in 2006, and rose further to 1.9 Exabyte in 2011

9 data centre in hong kong - where? The deployment of 4G mobile networks in Hong Kong starting from 2012 will boost the data throughput to subscribers. The improvement in network infrastructure will support the development of more mobile applications and further improvement in existing applications. For example, Online Video can be delivered in better quality and more smoothly over a 4G network compared to a 3G network. In addition, the growing adoption of cloud computing services, including data storage services and office applications, requires improvement in network infrastructure for a better experience among end users. Consequently, the improvement in network infrastructure will have a positive impact on the demand for data centre services. hong kong broadband internet traffic volume HONG KONG BROADBAND INTERNET TRAFFIC VOLUME Exabytes Note: 1 Exabyte = 1 Billion Gigabytes Source: Office of the Telecommunications Authority, HKSAR Government 9

10 2 hubs Data centre in asia According to a consultancy report, Economic Benefit Analysis of Developing Hong Kong Into A Regional Data Centre Hub commissioned by the government in 2011, data centre operators and end users indicate that even though they could enjoy cost savings in other locations, the majority of industry players prefer locating their primary data centre operations in Hong Kong over other locations in the region due to the following reasons. Demand from financial services industries Hong Kong is characterised by its strong banking and financial activities. Coupled with its unique role as the gateway to mainland China, the majority of end users in the banking and finance industries continue to keep their data centres in Hong Kong a strategic city for further business expansion and ease of communications. Safety considerations Hong Kong has been widely accepted by industry players as a safe place within the Asia region for setting up their primary and/or backup data centres due to institutional regulatory issues such as data privacy control. Meanwhile, Hong Kong can provide a safe and stable operating environment for data centres since it is not exposed to natural disasters such as earthquakes. Data centres in Hong Kong (distribution by key districts) Distribution DISTRIBUTION of OF known KNOWN data DATA centre CENTRE developed DEVELOPED by telecommunication BY TELECOMMUNICATION operators and data OPERATORS centre operators AND DATA in CENTRE hong kong OPERATORS IN HONG KONG % of Total Stock 0% 5% 10% 15% 20% 25% 30% 35% 40% Kwai Chung / Tsuen Wan 37.0% Tseung Kwan O 23.1% Chai Wan 13.9% Tai Po Shatin Kwun Tong / Kowloon Bay Quarry Bay 6.6% 5.9% 4.9% 4.8% Central / Admiralty Sheung Wan Lai Chi Kok Fanling San Po Kong Wan Chai / Causeway Bay 0.9% 0.6% 0.6% 0.6% 0.6% 0.4% Hong Kong Island Kowloon New Territories Source: Colliers 10

11 data centre in hong kong - where? According to Colliers research, the existing data centres across all tiers established by both telecommunications operators and data centre operators are spread over a number of different districts but the key clusters are found in three locations Chai Wan, Kwai Chung / Tsuen Wan and Tseung Kwan O. With reference to the total stock of industrial floor space, the floor size of data centres, 3.4 million sq ft in Hong Kong, accounts for a very small percentage of the pie. On Hong Kong Island, Chai Wan is the largest cluster with a total of about 480,000 sq ft of floor area of data centres. In 2000, Sun Hung Kai Properties (SHKP) - a major local developer redeveloped an industrial building in Chai Wan into a 350,000 sq ft development, which primarily caters for data centre functions. Currently, the building remains the largest data centre in Chai Wan. The SHKP group retains the majority of the space in the premises for its internal use while the remaining floor area is available for external parties. In the New Territories, a significant portion of data centres are located in Kwai Chung / Tsuen Wan area (1.3 million sq ft) and Tseung Kwan O (800,000 sq ft) since the areas benefit from good electricity supply and accessibility to a number of telecommunications operators. Tseung Kwan O district is the location with the second largest data centre stock in the city, accounting for about 23% of the total. The majority of the data centres in the district are located in Tseung Kwan O Industrial Estate which is managed by the Hong Kong Science and Technology Parks Corporation, a quasi-government organisation. The Industrial Estate offers fully-serviced land for lease at competitive rates. With the availability of substantial electricity supply, Tseung Kwan O Industrial Estate is a suitable area for developing large-scale data centres. In addition, there are data centres developed by financial institutions in the Industrial Estate. For example, HSBC has developed a 500,000 sq ft data centre for its own use which was opened in Meanwhile, The Hong Kong Stock Exchange (HKSE) is currently developing a 338,000 sq ft data centre in the Industrial Estate. The construction works were completed in August Upon its full completion by late 2012, the data centre will be available for lease to external financial services companies while HKSE will retain the majority of the space for its own use. Space requirement of data centres According to Colliers research, incoming data centre operators usually look for premises with floor areas ranging from 30,000 to 100,000 sq ft. To consolidate various data centres under one roof, the floor area requirements will be over 300,000 sq ft. Apart from the floor area requirements, the following are the typical minimum requirements for developing a Tier-3 data centre (see Appendix) hosting 300 cabinets. Data centre space Lease term: 8 to 10 years One cargo lift available Minimum 16 feet slab-to-slab clearance Minimum 250 lbs / sq ft structural floor loading Minimum 2.6 ft raised floor Ancillary spaces Network operations centre: 1,400 sq ft Security office: 430 sq ft Meet-me room: 430 sq ft Reception: 32 sq ft Staging room: 430 sq ft Store room: 1,500 sq ft Office: 2,690 sq ft Electrical requirements 2N (i.e. double) Transformers arrangement 2N (i.e. double) Generators and associated equipment arrangement 2N Static uninterrupted power supply (UPS) system with 15 minutes back-up battery time Mechanical requirements N+1 (i.e. additional) Computer room air-conditioning (CRAC) configuration for collocation spaces CRAC room and service corridor isolated from collocation areas Direct expansion refrigerant cooling 11

12 3 suitable where are the locations Among the list of requirements, the four most critical factors affecting the operators decisions in setting up new data centres in Hong Kong include power supply, ceiling height of the premises, accessibility to multiple telecommunications providers and availability of open space in the building for installing cooling systems. Operators of Tier-3 and Tier-4 data centres will only consider taking those premises fulfilling the requirements of all four of these factors. In view of the less strict requirements, Tier-1 and Tier-2 data centres can be established in existing average quality industrial buildings or office buildings. Those buildings with accessibility to multiple telecommunications networks by various providers are the preferred options among this class of operators. Due to the stringent requirements regarding the quality of the premises and the surrounding environment, not all locations are suitable for setting up higher-tier data centres. The physical specifications of existing industrial and warehouse premises (including the ceiling height and floor loading) fulfilling the data centre operators requirements is limited. Financial returns have justified property owners carrying out major renovations to modify the physical structure of their premises to match the operators requirements on ceiling height and floor loading. The existing high-tier data centres are mostly located in Kwai Chung, Tsuen Wan, Shatin, Tseung Kwan O and Kowloon East districts, which are Industrial and Other Specified Uses (Business) zones in urban and suburban areas of Hong Kong. The primary reason for the higher number in these districts is the need for a substantial electricity supply and accessibility to multiple telecommunications networks by various providers. Power hungry According to the Hong Kong Government, the power consumption of a high-tier data centre (requiring about MVA or mega volt amperes) can be as much as times that of a 320-unit residential building (typically requiring about 2 MVA electricity supply). Plan for upgrading power supply capacity Fanling Tai Po Tsuen Wan Shatin Kwai Chung North Lantau Kwun Tong Tseung Kwan O Plans to Upgrade Supply Capacity in High Potential Areas Power Supply Potential Growth 12 Source: CLP Power Hong Kong Limited

13 data centre in hong kong - where? Where is the best location? Prior to the relocation of Hong Kong manufacturing plants to mainland China, industrial zones in Hong Kong had been home to many manufacturing companies. The local electricity companies have been providing sufficient electrical supply to the industrial zones for supporting the manufacturing operations. Consequently, it will be easier for the operators to obtain sufficient power supply from the local electricity companies if they establish their data centres in industrial zone or Other Specified Uses (Business) zones which were former industrial zones. In addition, in view of the future increase in demand for electricity due to new data centres coming on line, CLP Power Hong Kong Limited, the power supply company, has planned for network reinforcement in developed areas such as Shatin, Kwai Chung, Tsuen Wan and Kwun Tong. Supply capacity in areas with growth potential, such as Tseung Kwan O and North Lantau will also be adjusted to meet future needs of data centres in the future. Accessibility to telecommunications networks In view of the growing demand for Internet applications and cloud computing services, demand for services offered by Internet data centres has been growing. As such, connection to telecommunications networks is vital. Due to a higher density of domestic and corporate subscribers in urban and suburban areas, more providers are offering Internet connection services, especially broadband, in these locations. Therefore, data centres in urban and suburban areas, especially the carrier neutral data centres, enjoy more Internet connection options compared to their counterparts in rural areas. The majority of the data centres in Tseung Kwan O are located in Tseung Kwan O Industrial Estate. Although the Industrial Estate is separated from the residential area in the district, one of the six submarine cable landing stations in Hong Kong is located in Tseung Kwan O Industrial Estate. Consequently, the telecommunications network in the Industrial Estate is wellestablished and connected to other areas of Hong Kong. Submarine cable landing stations in Hong Kong Tseung Kwan O Deep Water Bay Tong Fuk Chung Hom Kok Cape D Aguilar Source: Office of Communications Authority, HKSAR Government

14 4 industrial revitalisation of buildings Often industrial zones are suitable locations for data centres. However, until recently owners of industrial premises have been required to pay a waiver fee (or premium) to the government if they are used as data centres. Together with the major renovation works required for the premises to be occupied by high-tier operators, the viability of this has been questionable. In April 2010, the government implemented the Revitalise Industrial Buildings policy to optimise the use of industrial buildings. This policy allows eligible industrial building owners to apply, at a nil waiver fee, for change of use of the entire existing industrial building for the lifetime of the building or the current lease period, whichever is earlier. In addition to this policy, in February 2012 the government introduced further measures to facilitate development of data centres in industrial buildings. The Lands Department issued a Practice Note in June 2012 explaining the terms and conditions for developing high-tier data centres on industrial sites through lease modification and partial conversion of existing industrial buildings for data centre use. Applications are required to be submitted to the Lands Department by the end of March It is anticipated that the small to medium-size operators will be the major beneficiaries of the new measures of partial conversion of existing industrial buildings for data centre use. This group of operators cannot develop data centres in industrial estates as their floor area requirements are not sizeable. The new partial conversion measure provides more property options for setting up data centres in existing industrial buildings. 14

15 data centre in hong kong - where? Waiver for conversion of an entire existing industrial building Arrangement Nil waiver fee for changing an entire industrial building to other uses, including data centre use. Waiver for partial conversion of industrial building (new measure) Nil waiver fee for changing parts of an industrial building to data centre use. Lease modification for development of high-tier data centres on industrial sites (new measure) Premium for the data centre portion will be assessed on the basis of high-tier data centre use and actual development intensity, instead of optimal use and maximum development intensity. Eligibility criteria and approval conditions The industrial building must be aged 15 years or above. The industrial building must be located in Industrial, Commercial or Other Specified Uses (Business) zones. The proposed data centre use must be in part of an industrial building aged 15 years or above. The proposed data centre use must be located in an industrial building located in Industrial, Commercial or Other Specified Uses (Business) zones. Premium for non-data centre portion, if any, will be assessed according to established practices. The development must be on an industrial site. All proposed uses should be permitted in the respective zone or have planning permission for the proposed uses granted. The industrial building cannot revert to industrial use during the waiver period. The part of the industrial building covered by the waiver for data centre use must be used as data centre during the validity of the waiver. The data centre part of the development is presumed to be for high-tier data centre use. The proposed conversion works (if required) must be completed within three years of execution of the waiver. Any building works must be completed within three years of execution of the waiver. The data centre portion of the development should not be less than (i) 40% of the applicable maximum permissible development intensity or (ii) a plot ratio of 2.5, whichever is higher. The area for ancillary offices is limited to 30% of the total usable floor area of the data centre portion. Source: Office of the Government Chief Information Officer, HKSAR Government 15

16 5 operators key challenges for Although the government introduced policies helping data centre operators to set up their facilities in industrial buildings, the operators might face difficulties in locating desirable industrial premises for their operations. Security of tenure Data centres are capital-intensive investments. For example, according to Equinix, the estimated capital expenditure for developing its second data centre in Hong Kong, which hosts a total of 1,450 cabinets, is about US$72 million. Moreover, high-tier data centres are characterised by their high level of service availability. As such, frequent relocation of the data centres is not an option for this group of operators. Consequently, the operators seek long lease terms of eight years or more to amortise the development costs and maintain a high service availability level. In view of the operators requirements of long lease terms, premises owned by long-term investors are a viable choice for their data centre operations. Depending on the investment strategies, some building owners opt for long-term investment purposes and they may accept a three-year lease with an option to renew for three years and another three-year renewal option afterwards. Tseung Kwan O - The growing cluster There is potential for Tseung Kwan O Industrial Estate to transform into a cluster of large-scale high-tier data centres in Hong Kong. Since 2010, the Hong Kong Science and Technology Parks Corporation has made available over 10 hectares of land in the Tseung Kwan O Industrial Estate for developing high-tier data centres. According to the local government, 3.5 hectares were allocated in Moreover, the Chief Executive announced in the Policy Address that about two hectares of land in Tseung Kwan O had been reserved for data centre development. The first site, which covers a site area of about one hectare, is expected to be available for open bidding by mid In view of the new data centres coming up in Tseung Kwan O Industrial Estate, the CLP Power Hong Kong Limited is developing the first substation dedicated to powering data centres in the industrial estate. The substation will provide uninterrupted electricity supply, thanks to its two independent power sources, which will come on automatically should one of them fail. The commissioning of the new substation is scheduled for mid Encouraged by the government s intention to develop Tseung Kwan O Industrial Estate into a high-tier data centre cluster and additional power supply capacity coming on line in the next few years, some major operators have been acquiring and converting existing buildings in the Industrial Estate into data centres in order to shorten the development time. For example, HKCOLO and KDDI Corporation converted a 360,000 sq ft building in the Industrial Estate into its Telehouse Hong Kong Cloud Computing Complex. In addition, two major data centre operators have completed the joint venture acquisition of a 164,000 sq ft facility in the Industrial Estate in July According to the joint venture, reconstruction at the site is expected to begin in 3Q 2012 with the first data centre space delivered in mid Looking ahead, the new data centre sites coming on line and potential redevelopment of existing industrial buildings into data centres will promote the transformation of Tseung Kwan O Industrial Estate into a data centre cluster in Hong Kong. There is potential for Tseung Kwan O Industrial Estate to transform into a cluster of large-scale high-tier data centres in Hong Kong 16

17 6 market outlook Hong Kong has exceptional demand for data centres The prospective demand growth for data centers in Hong Kong continues to look positive by virtue of its strategic location in southern China. Similar to many economies around the globe, the fundamental demand driver for data centres in Hong Kong has been underpinned by the growing popularity of mobile web, massive mobile applications and cloud computing services. Within the region, Hong Kong has been widely accepted by industry players as a safe location for data centres. Besides the benefits of provided institutional framework (e.g. data privacy control), Hong Kong has been proven as a safe geographical location since it is not exposed to natural disasters such as earthquakes. According to a study commissioned by the Office of the Government Chief Information Officer, the demand for data centres in Hong Kong is expected to increase 78% from 2.3 million sq ft in 2009 to 4.1 million sq ft in Despite the common criticism of the lack of supply catering to the needs of large-scale multi-national corporations and small to medium-size enterprises, the government policies can help to solve the problem. The revitalisation of the industrial buildings policy allowing en bloc or partial conversion of industrial buildings for data centre use at nil waiver fee can help the small to medium-size operators. In addition, redeveloping the sites or renovating the existing buildings in Tseung Kwan O Industrial Estate are viable options for a group of large data centre operators. Therefore, there are viable real estate solutions to support further growth of the data centre industry in the city.

18 Appendix Data Centre Technical Definition According to Uptime Institute, data centres are classified into four tiers which are characterised by their serviceability levels. TIER Tier I Tier II Tier III Tier IV AVAILABILITY Typically experience two separate 12-hour, site-wide shutdowns per year for maintenance or repair work. In addition, across multiple sites and over a number of years, Tier I sites experience 1.2 equipment or distribution failures on average each year. The annual impact of maintenance and unplanned outages is 28.8 hours per year, or 99.67% availability. Schedule three maintenance windows over a 2-year period and have one unplanned outage each year. The annual impact of maintenance and unplanned outages is 22 hours per year, or 99.75% availability. Annual maintenance shutdowns are not required. Experience in actual data centres shows that operating better-maintained systems reduces unplanned failures to a 4-hour event every 2.5 years, or 1.6 hours on an annual basis. Tier III sites demonstrate 99.98% availability. Facility events affecting the computer room are empirically reduced to one 4-hour event in a 5-year operating period, or 0.8 hours on an annual basis. Tier IV sites consistently demonstrate 99.99% availability. Source: Uptime Institute

19 data centre in hong kong - where? The following table depicts selected real estate, mechanical and electrical attributes commonly associated with data centres. These attributes are not requirements of the Tier definitions. Selected common attributes that are unrelated to tier requirements Tier 1 Tier 2 Tier 3 Tier 4 Building type Tenant Tenant Stand-alone Stand-alone Useable for critical load 100% N 100% N 90% N 90% N Ultimate kw per cabinet (typical) <1kW 1-2kW >3kW (1) (2) >4kW (1) Support space to raised-floor ratio 20% 30% Over 80-90% Over 100% Raised floor height (typical) 12 inches 18 inches inches inches Floor loading, lbs/ sq ft (typical) Over 150 Utility voltage (typical) 208, , kV 12-15kV First deployed (1) Higher kw/cabinet densities require a greater ratio of support space to computer floor. Generally, deeper raised floors are required for higher densities. (2) Most sites have a difficult time maintaining stable and predictable cooling for racks in the 1-2 kw range. Major process improvements are required before entertaining rack densities above 2 kw. Source: Uptime Institute Data centre Type variations According to Data Center Knowledge, there are three distinct types of data centre architecture, each designed to support a specific business model and each with its own operational goals and challenges: Enterprise data centre Hosting or Infrastructure as a Service data centre Portal or Web 2.0 data centre An enterprise data centre typically serves many applications to a user base. The enterprise data centre may have less than 200 servers in a smaller company, or over 1,000 servers in a larger corporation. Most enterprise data centres are built to be internally facing for optimising IT applications and services. Meanwhile, a number of enterprise data centres are also publicfacing for serving customers. Portals or web 2.0 data centres are typically public-facing to provide an online user experience such as search, gaming or social networking. In portal data centres, the data traffic primarily runs within the data centre as users access applications and content from multiple sources, and tend to keep traffic within the data centre whenever possible. Hosting data centres can range in size from huge operations spanning dozens of global data centres to small operations with a few dozen customers. Being versatile in their structure, these data centres provide their clients with numerous services to provide computer infrastructure, the nature of which is determined by the relevant service level agreement (SLA) and, therefore, mainly serve external bandwidth. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved. Colliers International is a leading global real estate services company. 19

20 authors: Richard Kirke Managing Director Hong Kong tel Individual Licence: E Wayal Chiu Director Industrial Services Hong Kong tel Individual Licence: E Simon Lo Executive Director Research & Advisory Asia tel Arthur Yim Manager Research & Advisory Hong Kong tel Suite 5701 Central Plaza 18 Harbour Road Wanchai Hong Kong tel FAX Company Licence No: C