Thursday, November 23, 2017

European data centres move record $6bn in 2016

Also find out what data centres and retirement homes have in common.

A year of intense M&A activity has set the data centre industry in Europe aside by the value of transactions which have increased by more than a four-fold compared to 2015.

According to research house Real Capital Analytics (RCA), the first 11 months of 2016 have led investment in European data centres to hit $5.94bn.

The value is mostly attributed to Equinix’s $3.3bn acquisition of TelecityGroup plus the acquisition of a data centre in Saint-Denis, Paris, by the colocation provider from Digital Realty for $201m.

In addition, the acquisition of eight data centres by Digital Realty after the European Commission told Equinix the company had to divest eight hubs to approve the Telecity acquisition generated another $874m in investment.

Together, Equinix and Digital Realty accounted for nearly 72% of all data centre investments in Europe in the period between January 1 and November 30.

The report has also found that data centres and retirement and care homes were the only two sectors which doubled investment money compared to the previous year. Retirement and care homes accounted for $5.2bn in 2016.

RCA released the figures through its Alternative Real Estate watch. The sector is set to hit a new record this year with total figures in the first 11 months of the year accounting to $31.95bn.

Tom Leahy, director of EMEA analytics at RCA, said: “Prospects that interest rates in Europe will remain low for a while longer mean that investors looking for income will increasingly look to the alternative property sector, which can offer attractive income returns, the benefit of diversification and the possibility of counter-cyclical performance.

“We expect this pattern to continue in 2017 as more capital flows into the niche sectors that some significant players are seeking to transform through the consolidation of these often fragmented and local markets.”