ESR Cayman Limited, the largest Asia-Pacific focused logistics real estate platform, submitted a planning application further detailing its previously announced conversion of a building with cold storage use in Hong Kong, into a data center with 40 megawatts of power capacity. Specifically, ESR Cayman’s new data center will be located at 11-19 Wing Yip Street, Kwai Chung in the New Territories region of Hong Kong.
In May 2021, ESR Cayman acquired this building, known as Brilliant Cold Storage Tower 2, from the late Hong Kong property mogul Tang Shing-bor for $242m USD (HK$1.88bn). Historically, this building had been operated by Brilliant Cold Storage Management Ltd.
Additionally, in terms of timing, the Hong Kong Government’s Town Planning Board has set January 14, 2022, as the tentative date for its meeting on ESR Cayman’s application.
Hong Kong Data Center – 11-19 Wing Yip, Kwai Chung – ESR Cayman
ESR Cayman’s proposed Hong Kong data center is situated in Central Kwai Chung. This area is predominantly occupied by a mix of commercial, industrial, and industrial-office buildings.
The building is located at 11-19 Wing Yip Street, bound by Wing Yip Street to its south, Wing Yip Industrial Building to its immediate east, and industrial / commercial buildings to its north.
Overall, the 15-story building resides on 34.6k sqft (3.2k sqm) of land area. Through a “wholesale conversion”, ESR Cayman will deliver a data center with up to 352k sqft (32.7k sqm) of gross floor area (GFA).
Additionally, the planning application highlights that the building has a back-up transformer bay and generators on the 3rd and 11th to 13th floors. Indeed, this power supply can prevent disruption at the future data center should a power failure occur from causes such as extreme weather or power black-outs.
Wholesale Conversion
ESR Cayman anticipates that its wholesale conversion of the Kwai Chung cold storage building into a data center will result in a facility with a gross asset value (GAV) of $675m USD upon completion. Also, the conversion exemplifies the highest-and-best-use for cold storage real estate, given its similar building specifications to data centers.
ESR Cayman – Asia-Pacific Data Center Expansion
Broadly, ESR Cayman is evaluating further data center opportunities from its pipeline of 1,200 megawatts of power capacity across Asia-Pacific. Specifically, these data center investments include ESR Cayman’s development in Osaka, Japan (78 megawatts) and a development project led by LOGOS Group in Jakarta, Indonesia (20 megawatts).
Recall that ESR Cayman is in the process of acquiring ARA Asset Management for $5.2bn. ARA owns logistics and data center assets, via its subsidiary, LOGOS Group.
