ESR SUBMITS PLANNING APPLICATION TO CONVERT COLD STORAGE TOWER INTO 40MW DATA CENTRE
PRESS RELEASE: ESR is proposing to convert its first Hong Kong industrial asset into a 40MW data centre, about six months after acquiring Brilliant Cold Storage Tower 2 from the family of the late local tycoon Tang Shing Bor for $230.8 million.
Hoping to repeat its warehouse success in the digital infrastructure space, ESR has applied to convert the former cold chain facility in the city’s Kwai Chung district into a data centre, with the Hong Kong-listed firm estimating that the completed project will have a gross asset value of $675 million.
Should the application be approved, the logistics giant expects that the completed project would become “a catalyst for revitalising the Central Kwai Chung Industrial Area,” according to its application plan.
The Hong Kong data centre move comes less than a month after shareholders in ESR, which has assets under management totalling $36.3 billion, gave the green light for its proposed $5.2 billion acquisition of Singapore-based fund manager ARA Asset Management, paving the way for the merged entity to become the largest real asset manager in Asia Pacific and the third-largest listed real estate investment manager globally.
Jumping into a Data Centre Hotspot
The Brilliant Cold Storage Tower 2, a 15-storey building occupying a 34,595.2 square foot site, is located in Kwai Chung which over the years has become a hotspot for data centres, with US-based data centre REIT Digital Realty earlier this month opening its second data centre in Hong Kong on a site just two kilometres (1.2 milles) away.
When ESR first announced its Kwai Chung industrial acquisition in May of this year, the firm noted that the purchase gave it a toehold in an infrastructure hotspot, and called the deal a “rare brownfield opportunity in a major data centre cluster.”
“Hong Kong is an important data centre market in the APAC region, with its low electricity costs, limited climate risks and established network capability,” ESR co-founders and co-CEOs Jeffrey Shen and Stuart Gibson said at the time.
With the Kwai Chung asset now in its portfolio, ESR is planning to boost the plot ratio by 7 percent from the current 9.5 to 10.19, which would increase the maximum floor area from 293,855 square feet (27,300 square metres) to 352,335 square feet.
Should the property at 11-19 Wing Yip Street in the western New Territories win approval for redevelopment, the company expects that the project would be completed by the end of 2026.
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