Grand Ming’s iTech Tower 3 complex (Image: DC Byte)
Amazon Web Services has agreed to buy two data centre projects in Hong Kong’s New Territories from debt-laden developer Grand Ming Group for up to HK$2.45 billion ($312 million), in a deal that would turn an existing tenant into the owner.
The digital infrastructure unit of the e-commerce titan signed agreements after trading closed Friday to acquire iTech Towers 3.1 and 3.2 in the Fanling area for a base HK$2.18 billion, with potential additional compensation of up to HK$265.8 million tied to completion of the remaining phases of the twin projects, according to Grand Ming’s filing.
The Hong Kong builder’s sale of the two properties follows two announcements of negotiations with separate buyers last year, with both of those attempts failing to result in a deal. Referring to “the group’s pressing need to reduce debt”, Grand Ming characterised the sale as a necessary part of a restructuring after the auditor of its 2025 books pointed to uncertainty regarding its financial viability.
“The group’s going concern assessment relied on a package of measures which included the successful disposal of the properties,” chairman Chan Hung Ming said in the filing.
Desperate Times
The Hong Kong developer’s hardship provided AWS with an opening to acquire the twin 8MW (by IT load) facilities, which span 186,000 square feet (17,280 square metres). At the minimum compensation, AWS would be paying HK$15.3 million per MW for the assets.
Amazon managing director for Asia Pacific, Japan and China, Jaime Valles (Image: Amazon)
Grand Ming delivered the first two phases of iTech Towers 3.1 to AWS in December last year, with fitout of the remaining phases ongoing. The statement did not directly identify AWS as the occupant of the iTech Towers 3.2, which is expected to be completed in stages starting next year. However, AWS’s compensation under the agreement is noted as net of payments already made by the buyer for construction of the building.
Grand Ming has not disclosed the counterparties in its earlier negotiations, but press reports have identified the unsuccessful suitors as Bain Capital and later the UK’s Actis.
Amazon took delivery of the first two phases of iTech 3.1 in December 2025 and its consent is required for any sale of that property to another buyer, Grand Ming said. The developer cited that position, and symbiotic design of the neighbouring projects, in explaining its decision to sell both assets to the US group.
“The group has pursued potential disposals since June 2025 and entered into non-binding processes with different parties, but no definitive agreement resulted,” Grand Ming said.
Debt Relief
The developer disclosed covenant breaches affecting HK$4.8 billion in loans in July 2025. Its financial position remained strained at 31 March 2026, with HK$5.4 billion in loans repayable on demand or within a year against cash and bank balances of HK$24.3 million, after an annual loss of HK$349.5 million.
Grand Ming expects to book a disposal loss of HK$1.09 billion if none of the conditional payments arrive. The base price is 19 percent below Knight Frank’s HK$2.69 billion preliminary valuation, though that appraisal assumes completion of the outstanding works. The maximum price is 9.2 percent below the same valuation.
After deductions and expenses, base net proceeds would be HK$2.08 billion, short of the HK$2.17 billion expected to remain outstanding under the property loan facilities. The proceeds must go towards repayment, leaving an HK$87.1 million gap that Grand Ming may need to cover through further asset sales if the conditional payments are not received.
If all milestones are met, net proceeds would rise to HK$2.32 billion, leaving HK$153.7 million for working capital after repaying the facilities. Grand Ming expects the planned repayment to save HK$136.3 million a year in financing costs, but it still has HK$72.5 million in estimated construction and fit-out costs outstanding.
Grand Ming’s shares jumped 39.7 percent on Monday to HK$0.405, then fell 13.6 percent on Tuesday to close at HK$0.35. That left the stock 20.7 percent above Friday’s HK$0.29 close, before the announcement, but still down about 60 percent since the start of the year.
The initial closing target is 26 February 2027, subject to shareholder approval, permits, security releases and a lender standstill agreement. Chan and his wholly owned vehicle, which together hold 64.89 percent of Grand Ming, have undertaken to vote in favour.
Expanding Pipeline
Amazon’s agreement adds a direct purchase by a cloud computing group to Hong Kong’s recent data centre investment activity. Goodman Group announced last week that it had raised $455 million in equity for its $2.7 billion Hong Kong Data Centre Partnership, primarily to fund mechanical and electrical works at its HKG10 project in Tsuen Wan.
HKG10 is designed to deliver 32 megawatts of IT capacity backed by 50MW of secured primary power, with first capacity expected in early 2028. The partnership launched in July 2025 with Goodman holding a 20 percent stake alongside PGGM, APG, the Canada Pension Plan Investment Board, CBRE Investment Management and an unnamed Middle Eastern investor.
Gaw Capital Partners last month announced a non-binding plan to invest up to HK$2 billion in an AI computing venture at broadcaster TVB’s Tseung Kwan O campus. TVB would own 51 percent and Gaw 49 percent, with the first phase targeted to begin operating in the fourth quarter of 2027, subject to approvals and definitive agreements.
Further north, the government last October launched a tender for a Sandy Ridge data centre site requiring at least 150,000 square metres (1.6 million square feet) of floor area. It awarded the site in March to Hong Kong Range Intelligent Computing Technology Company for a land premium of HK$581 million after receiving a single bid.
The government said last week that Sandy Ridge had entered construction, with operations due to begin by 2029. Amazon’s Fanling purchase covers projects at different stages: iTech 3.1 already generates rent, while iTech 3.2 remains under construction, with the deal allowing ownership to transfer before all remaining works are finished.
