Hong Kong’s data center ambitions face slow start amid funding challenges

Hong Kong wanted to build itself into a data center powerhouse. So far, the powerhouse has one tenant and a very large financing question mark.

The city’s Sandy Ridge Data Facility Cluster, the centerpiece of its Northern Metropolis development strategy, launched its initial tender process between October and December 2025. The result: a single bid. Range Intelligent Computing Technology Group, a mainland Chinese company, was the only firm that raised its hand, committing an investment of approximately HK$24 billion. Local developers, the companies Hong Kong might have expected to lead the charge, stayed on the sidelines entirely.

One bidder, billions in question

Range moved quickly after winning. The company secured a 50-year land grant in March 2026 for an estimated HK$23.8 billion project designed to deliver up to 250,000 square meters of gross floor area. The facility aims to provide 180,000 PFLOPS of computing power by 2032.

But building a data center of that magnitude requires capital that Range doesn’t appear to have sitting in a bank account. The company is now pursuing roughly HK$20 billion, or about $2.6 billion, in short-term bank financing. That figure would make it one of the largest loan deals sought in Hong Kong this year.

Concerns center on Range’s repayment capacity and the challenges inherent in developing in a remote location that currently lacks the infrastructure to support it.

The project is expected to generate HK$4.6 billion in economic output during its first three years.

Why Hong Kong is betting on data centers

Hong Kong’s existing data center capacity stood at approximately 687 MW as of Q1 2026. The AI revolution is driving demand for higher power densities that existing facilities weren’t designed to handle.

Approximately 90% of recent data center leasing deals in the region have been driven by Chinese AI firms. That concentration has caused wholesale prices to spike sharply, creating a market where supply can’t keep pace with appetite.

The financing test that matters most

Range’s financing pursuit is being watched closely because it functions as a referendum on something larger than one company’s creditworthiness. If lenders commit to the deal, it signals that Hong Kong’s banking sector is willing to underwrite the city’s AI infrastructure ambitions at scale. If they don’t, it sends a chilling signal to every other developer and operator evaluating similar projects in the pipeline.

The absence of local developer participation in the original tender already tells a story. Hong Kong’s property giants looked at Sandy Ridge and passed.

Competition from established Chinese hyperscalers adds another layer of complexity. Companies like Alibaba Cloud, Tencent Cloud, and Baidu have their own data center expansion plans across the Greater Bay Area.

The 90% concentration of leasing demand among Chinese AI firms introduces concentration risk. If China’s AI sector hits regulatory headwinds, or if geopolitical tensions redirect computing workloads elsewhere, Hong Kong’s data center bet becomes significantly less attractive.

The project’s 2032 completion target for full computing capacity gives Range some runway, but short-term bank loans by definition don’t offer the kind of patient capital that a seven-year buildout demands.