Thursday, October 19, 2017

European colocation data centres set for record 20% growth in 2017

London, Paris, Frankfurt and Amsterdam have now a combined colocation supply capacity surpassing the 1000MW.

The Big 4 European data centre hubs of London, Paris, Frankfurt and Amsterdam are expected to deliver their biggest supply growth in history with nearly 20% of all supply coming online this year alone.

According to CBRE’s “Europe Data Centres, Q2 2017” market report, the first half of 2017 delivered a combined supply growth of 74MW, with a further 120MW of supply expected to be brought online by the end of 2017.

“This unprecedented level of new supply in driven by enormous confidence in European take-up, exemplified by a combined 31MW of transactions across the four key markets during Q2,” researchers said.

“This brings total take-up in H1 2017 to 58MW, “a new record for the first-half of any year”, with 31MW delivered in Q2. The market is expected to close the year with 120MW of take-up.

CBRE defines take-up as the data centre space sold at retail price and wholesale colocation facilities.

Based on Q2 figures alone, colocation supply has increased by 3.6% with power availability also going up by 4.5% and colocation take-up 16.9%.

For the first time, London, Paris, Frankfurt and Amsterdam have also reached a combined supply power of 1,032 MW, with the addition of 36MW in Q2 mostly driven by Digital Realty’s new 12MW Amsterdam facility and Gyron’s 10MW expansion of its London footprint.

When split, the 1,032 MW correspond to 516MW of retail let power, 349MW for wholesale let and 167MW of available power (102MW in wholesale centres and 65MW in retail providers).

For the period between July and December 2017, CBRE predicts the market will see 57MW more supply than take-up, pushing the total vacant supply to 223MW, pushing vacancy rates to 19.7%, from 14.9% at the beginning of the year.

In Q2, London registered 33MW of take-up, which brings its share of YTD take-up across the four markets to 57%.

Amsterdam sold 10MW of power in Q2, while Frankfurt and Paris again suffered from the cyclical nature of current demand, researchers notes, “but CBRE expects that both markets will pick up  in the next year”.

Mitul Patel, Head of EMEA Data Centre Research, EMEA at CBR, said: “Confidence in the European colocation sector is higher than ever and Q2 delivered another blockbuster performance. The cloud companies that are driving recent growth in Europe show no signs of decelerating in their procurement of colocation space and developers are responding in-kind with an unprecedented level of build activity.

“The continued increase in our use of IT and reliance on the digital world, and thus the increased need for processing power, has led to record-breaking levels of new supply and take-up since 2016.

“In context, in the six quarters prior to 2016 we saw 90MW of new supply and 91MW of take-up. In the six quarters since, we have seen 204MW of new supply and 212MW of new take-up.”