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Growing confidence and cloud take up drive data centre investment

Tue 8 Apr 2014

Growing corporate confidence coupled with sustained demand by cloud providers continues to drive new interest for data centre services, with London and Frankfurt leading the way, according to research from global property advisor CBRE.

Across the five key markets of London, Frankfurt, Amsterdam, Paris and Madrid, a total of 8,090 sq m of data space was transacted in the third quarter of 2013, 51% up on the same period in 2012.

As business confidence continues to strengthen, new occupiers particularly from the Technology, Media and Telecoms (TMT) sector are coming to the fore and bring new requirements to the market. Frankfurt for example, continues to benefit from its status as a major connectivity hub in Europe, where colocation take up is now 23% ahead of the same period as last year.

Recent positive economic news in the UK is beginning to encourage greater appetite from corporate end users toward IT expansion plans. London’s data centre operators are seeing the benefit. Total transacted space across the capital this year has hit 8,795 sq m with space taken at retail colocation providers accounting for 70% of this take up.

Across all markets the burgeoning impact of cloud technology in demand schedules is visible. Corporate end users are now incorporating cloud into future IT strategies, which in turn are creating new business opportunities for data centre operators as dedicated Cloud providers require more capacity.

Andrew Jay, executive director, EMEA data centres, CBRE, commented: “It is encouraging to see an increase in new enquiries, despite mixed economic data. Some of this new demand is now translating into confirmed transactions. Although there is an emerging upturn in new business for operators, the markets remains largely well balanced. Last year’s record new build activity has meant the focus remains portfolio consolidation and the pursuit of expansions plans into new geographies.”

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