“These record levels of development… are creating challenges”
The European data centre market is on track to report 200MW (megawatts) of take-up in 2019 – the highest recorded level of annual activity to-date – with Frankfurt alone set to be the first European market to record 100MW of take-up in one year, according to consultancy CBRE.
There was 38MW of take-up by data centre customers in Q3 alone, with 63MW of new supply coming on-stream across the four markets of Frankfurt, London, Amsterdam and Paris: and real estate and data centre specialist CBRE says Q4 activity is on tract to nearly double that figure.
Demand is being driven by cloud hyperscalers, with enterprise demand for co-location environments also remaining robust. Growth in demand is being dominated by Frankfurt and London, according to Los Angeles-based CBRE – the world’s biggest commercial real estate services firm.
“These record levels of development underway in the major European markets are creating challenges”, said CBRE’s Mitul Patel.
The company’s head of EMEA data centre research added: “The availability of freehold land in popular data centre hubs, which offer proximity to large amounts of HV power and fibre routes, such as Slough in the UK and Schiphol in Amsterdam, is highly constrained.
“The effects of these barriers to entry are that data centre developers are either choosing to locate in new, sometimes unproven, locations or are competing aggressively on price for land opportunities.
“Despite cloud providers driving market activity, enterprise demand for co-location remains consistent across the major markets. CBRE analysis shows that in the four years from 2016, there has been an average of 43MW of enterprise take-up per year across the four FLAP markets. As enterprise companies continue to utilise colocation footprints as part of their hybrid IT architecture, we expect this to remain consistent.”
CBRE forecasts that 70MW of new take-up will be added to the FLAP market total in the final quarter, pushing the full year to beyond 200MW. This would be the first time on record that the four markets have breached 200MW of take-up in a single year.
According to CBRE, a further 150MW of new supply will be brought online in Q4. The new capacity represents nearly 50% of all the new capacity in the four markets during 2019 and will equate to a 23% growth in total market size during the year.