Investors predict spike in European data centres in the next two years
The value of investment into European data centres is set to increase in the next 24 months, although Brexit has had a significantly negative impact on the data centre infrastructure market.
The vast majority (92%) of debt and equity investors surveyed expect the overall value of investment into Europe’s data centre infrastructure to increase over the next 24 months, according to research commissioned by law firm DLA Piper.
The report found that investors anticipate an investment increase in data centres of between 10% and 29% over the next two years.
Data from Acuris in the report shows that the first half of 2019 has already seen a notable rise in investment – with €1bn flooding into the data centres market in H1 alone, compared with a total of €1.5bn for the whole of 2018.
Data centre investment levels in Europe have been impacted by Brexit uncertainty, as all respondents agreed that it has negatively impacted the data centre infrastructure market since June 2016, with 56% of equity investors going as far as to say that the negative impact has been ‘significant’.
However, the continuing weakness of the sterling means UK assets may look like a bargain for Eurozone investors, according to the law firm.
Partner and Head of the Infrastructure sector, EMEA and Asia Pacific, at DLA Piper, Martin Nelson-Jones, said: “Investment into European data centres has spiked recently, with transaction values reaching a new high.
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“Figures for the first half of 2019 suggest strongly that another record year could be in sight. While not without risks, data centres are attractive to many infrastructure investors.”
The report also highlights that the majority of respondents chose Germany as the European country that will see the biggest growth in data centre project investment over the next 24 months.
Investors also expect the UK to see some of the biggest investment growth in the industry, followed by the Netherlands and France.
“What makes data centres so attractive to many investors? Strong fundamentals help,” said Intellectual Property and Technology partner at DLA Piper, Anthony Day.
“While data centre investment can involve a higher level of risk as compared to other types of infrastructure assets, demand for big data, cloud computing, artificial intelligence and the Internet of Things is rising significantly.
“The macro trend is that these technologies drive significantly increased demand for data and digital services and, by extension, the buildings and equipment that make them possible.”
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