The European data center market refuses to buckle under the pressure of the Euro crisis, according to the latest European Data Centres ViewPoint released by CBRE Research.
Even Madrid, which is not seeing as much demand as a result of the cautious Spanish business environment, is adding more space.
CBRE head of data centers for EMEA Andrew Jay said the rising number of cloud providers, demand for technology and telecommunications services and the enterprise push for efficiency are behind the growth in the market in Q2, which despite being slower than Q1, saw a notable increase of 7,345 sq m of data center space (9.3MW of IT load).
“Although this total is noticeably less than Q1, it compares favourably to the same quarter in 2011. It also provides clear evidence that demand for data center services is continuing to weather the global economic turmoil well and in many cases, better than other asset classes of real estatate,” Jay said.
“At this level the industry is on track to meet our forecast for this year of close to, or above, the 40,135 sq m of 2011.”
Adding data center capacity
Overall, European operators have added close to 38,000 sq m (53MW) of capacity to the wholesale market in the last 12 months, and Jay said he expects this to grow to about 33,000sq m (50MW”) by the end of the year.
Retail supply increased by 18,000 sq m (25MW) since Q2 of 2011.
The amount of available space, thanks to new projects by retail operators in Amsterdam and Paris, had increased mid-year to 14.2%.
“Total supply of European data center space has risen by 6%, or an additional 51MW of IT power since the turn of the year,” Jay said.
“The need for new supply has been dictated by the sustained flow of demand which has outpaced the rate of replacement stock.”
Much of this demand is being seen by the technology and telecommunications sectors, driven by the take up of cloud services and use of mobile devices. Tech and telco companies now make up about a third of all new data center business, according to the report.
The overall enterprise environment is also looking a bit less gloomy, with more companies looking to invest, many in services.
“IT outsourcing continues to drive the market for technical real estate, and there is plenty of research which suggests that it is likely to continue to do so in the near future,” Jay said.
Businesses in Madrid, despite needing to become more efficient, seem reticent, however, to part with their money given the nation’s economic woes.
Total takeup for its Q2 was around 60 sq m in Madrid, in comparison with London’s 1,475 sq m or 2.1MW or power.
“In one sense the need for businesses to retain capital to support core functions is encouraging outsourcing to be considered,” Jay said.
“However, companies are well aware of the challenging business environment and are cautious about endorsing any significant spending in particular as a replacement of a recognised in-house function.”
The CBRE report shows Paris’ data center market is on the rise again, with 2,455 sq m (or 3.5MW) of takeup, but this market is also heavily affected by corporate demand.
Amsterdam is still enjoying its reputation as an internet hub, with cloud and hosting providers driving the demand that has led to 1,690 sq m of take up.
In Frankfurt, take up is being led by connectivity and technology companies. It transacted 1,665 sq m – or 1.7MW of IT power – in Q2.
This is only a snapshot of the figures released by CBRE. You can download the full report from the DatcenterDynamics FOCUS website here.