Google has cancelled plans to built a data center in Hong Kong, claiming that the cost of the operations and issues acquiring necessary real estate has forced its hand.

The Hong Kong site — which was estimated to cost $300 million — would have complimented data centers that are being built in Taiwan and Singapore. Together they are (were) expected to provide a speed boost of up to 30 percent for Google services in Asia, where the company is seeing a surge in usage, particularly from smartphones.

The website for the Hong Kong data center project is no longer available, and there is even a suggestion that the company’s fractured relationship with the Chinese government may have played a part in the reversing of the plan. The Internet giant controversially exited the country in 2010 following allegations that Chinese authorities hacked into email accounts belonging to activists.

In a statement provided to TNW, Google stressed its continued commitment to Hong Kong despite today’s news:

While we see tremendous opportunity and potential in Hong Kong – we’re actively hiring, just opened a larger office and recently launched a partnership with the Chinese University of Hong Kong to invest in tomorrow’s innovators – we will not be moving ahead with this project.

To keep up with the rapid growth in users and usage across the region, we need to focus on locations where we can build for economies of scale. Unfortunately, there is a lack of land for expansion in Hong Kong. We will continue to work closely with the government on this process, and will continue to invest and grow in Hong Kong.

The data centers in Taiwan and Singapore are expected to come online next year, and are unaffected by the change in plans for Hong Kong.

Image via Cory M. Grenier / Flickr