The European data center markets are heading for a record breaking year of take-up, and the four top markets - Frankfurt, London, Amsterdam and Paris (or FLAP) - together have more than 2,000MW of capacity supply for the first time ever, according to a report from CBRE
The real estate giant with a data center specialization says that 442MW of new supply will come online this year, and take-up of this capacity is still brisk, with the FLAP markets filling a record 92MW of capacity in Q1 and 370MW of take-up predicted over the whole year.
FLAP still ahead
The big surge is explained by a combination of more enterprise data center capacity being taken while hyperscale and cloud continue to grow, according to CBRE EMEA data center research director, Penny-Madsen Jones in the report: “We are hearing more about new sites coming on specifically to meet enterprise requirements at the same time as a large number of hyperscale-focused sites are being launched.
“The industry realizes the importance of having a healthy ecosystem of cloud providers and cloud end users in a market to maintain the importance of the data center hub. The balance of supply and demand, as a result, is going to remain incredibly important for these markets moving forward.”
While some other analysts have suggested that Dublin may be ready to displace Paris, and earn a place in the top four. Madsen Jones doesn't see this happening right now: “While we have seen some customers explore new market options outside of FLAP as a result of these challenges, many still have a requirement to be inside markets they may be serving.”
The market is still pretty choppy - "only" 51MW came online in Q2, and 48MW was taken up in the FLAP markets. CBRE expects things to speed up in Q3, with some 130MW coming online, just short of the 133MW that came online during Q1.
The fly in the ointment is the supply chain issues, which make it hard to fill data centers with mechanical and electrical (M&E) equipment and servers. This has delayed some projects around the world: in Loudoun County Northern Virginia, it has dented the local administration's tax take.
The report is clear that most new supply is being driven by hyperscale cloud deals - although retail colocation providers are seeing continued interest from enterprise and other non-cloud customers, as Madsen Jones noted. The continued growth in colocation is being driven by enterprises switching off in-house data centers in their traditional office environments.
Some markets are constrained - Frankfurt in particular is planning to regulate data center building. CBRE predicts that Frankfurt and Paris will break records, with 167MW of new space in Frankfurt and 87MW in Paris. Take-up will also be fast there, with 125MW occupied in Frankfurt and 85MW in Paris this year.