Tuesday, April 5, 2016

Facilitation Measures for Data Center Development Extended in Hong Kong

The Hong Kong Government announced that the Chief Executive in Council (CE in Council) has approved the extension of the existing concessionary scheme to encourage the development of data centers by conversion of old existing industrial buildings and lease modification of industrial lots.

"The Government is committed to promoting the development of data centers in Hong Kong to meet industry demand, which is expected to rise further in the next few years due to the increasing use of cloud computing and other new initiatives such as smart city development and big data applications," a spokesman for the Innovation and Technology Bureau said.

"Given the competing demands for new government sites, conversion of old industrial buildings would be a viable option for data center operators. With recent technology advancements in modular data centers, more industrial buildings can become suitable for such use."

The existing time-limited concessionary scheme for data centers was introduced in 2012. With the CE in Council's approval, the following measures will continue after March 31, 2016 in Hong Kong:

(1) to exempt the waiver fees for issuing waivers for applications approved by the Lands Department (LandsD) for change of use in parts of industrial buildings aged 15 years or above in "Industrial", or "Other Specified Uses" annotated "Business" or "Commercial", zones to data centers of all tiers for the lifetime of the existing building or until expiry or determination of the current lease of the lot concerned, whichever is the earlier;

(2) to accept applications for lease modification (including land exchange) tailor-made for development of high-tier data centers wholly or in conjunction with other uses on existing industrial lots, instead of requiring a lease modification up to the optimal uses and maximum development intensity that could possibly be allowed for the site; and

(3) to continue the arrangement that Conditions of Sale for new sites identified for data center development be tailor-made for high-tier data center use with specified gross floor area, including the two remaining dedicated sites in Tseung Kwan O.

The concessionary scheme has attracted a positive market response, with a total of 27 applications received up to March 29, 2016, for converting parts of existing industrial buildings to data center use under the first measure above.

In addition, the LandsD together with the Office of the Government Chief Information Officer (OGCIO) will streamline the procedures for issuing waivers for change of use of industrial buildings under the first measure mentioned above, aiming to approve new applications within a much shortened time frame of around two weeks. For details, please visit websites of the LandsD (www.landsd.gov.hk) and the OGCIO (www.datacentre.gov.hk).

In 2012, the Government reserved 3 dedicated sites in Tseung Kwan O for high-tier data center development, of which one was sold in October 2013. It is expected that the Government will put to sale the other two sites within the coming few years.

Source: www.info.gov.hk

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