Saturday, November 25, 2017

Exclusive. Amsterdam beats Frankfurt, Paris and Dublin to be mainland Europe’s largest colocation data centre hub

Yet, Digital Realty, e-shelter, Zenium and Colt could be about to threaten Amsterdam’s place in the charts with the launch of new sites elsewhere.

Amsterdam has become EMEA’s second largest colocation data centre hotspot in with a 22% market share after overtaking Frankfurt in Q3 2017.

With only London sitting ahead, Amsterdam has had a flow of new stock coming online this year which has propelled the size of the market when measured by IT power, according to JLL’s EMEA Data Centres Q3 2017 Market Review.

According to the report, at the end of Q3, Amsterdam had a total power supply of 292MW, compared to Frankfurt’s 251MW, which represented 19% of the market. Paris (14%) and Dublin (9%) had 180MW and 97MW respectively.

Only London’s total supply is able to exceed Amsterdam at 488MW and with 38% of the market share.

However, Amsterdam has for the first three quarters of the year been the capital that most supply has added at 56MW. This is followed by Frankfurt with 41MW, London with 26MW, Dublin with 19MW and Paris with 15MW.

Including JLL’s projections for the remainder of the year, the think tank expects Amsterdam to continue ahead of any other mainland top-Tier destination with a projected 295MW, a 47% compared to 2016.

Frankfurt comes second in terms of CAGR at 23%, and is expected to reach 260MW, followed by Dublin with a projected CAGR for 2017 versus 2017 at 16%, growing towards the 98MW, and Paris’s is expected to grow 13% to 185MW.

As for London, however the British capital continues to be EMEA’s main data centre destination, the city is only expected to grow 9% to 495MW.

However, Amsterdam’s place as the second largest colocation capital is in risk, as Martin Carroll, director for data centres, at JLL, told Data Economy: “We forecast Frankfurt will reassert its dominance over the next 12 months as more schemes enter the market from Digital Realty, e-shelter, Zenium and Colt.”

Also asked if Amsterdam could one day take over London, Carroll said that at this stage the scenario is highly unlikely.

“The gap between the size of London and the mainland competitors is still very large,” he said.


Market to go back to long term equilibrium state

As competition between the five capitals increases, overall, the market is about to enter a new period of change with JLL forecasting MW take up rates to fall below 2017’s levels.

Carroll said: “Take up has been exceptional across Europe over the past 24 months and we expect some slowing of that in different cities as the market returns closer to long term equilibrium as opposed to record beating years.”

Also in terms of colocation pricing, the sector is about to change as predicted in the report. With exception for Frankfurt, JLL forecasts prices to either go up or remain the same through to 2020.

On a 500kw colocation pricing basis, Dublin is set to continue being the most expensive out of the five cities, with costs averaging today around €150 and set to increase to around €160 by 2020.

Carroll said: “Pricing in the early part of the decade was under pressure due to supply and the high level of competition across Europe.  Over the past 36 months due to the amount of take up and as a result falling supply and vacancy rates coupled with M&A activity pricing has moved back up to a stable state.

“We see some minor increases in markets with very short supply over the next 24 months but generally stable state to 2020.”