It would be an understatement to say that 2020 has been a year of extremes, with the worst global pandemic in a century and profound economic shocks roiling markets.

But a shred of economic optimism can be found within the data center industry, where the total value of mergers and acquisitions has beaten all records, a feat not achieved since 2017, when the number was more than that of both 2015 and 2016 combined, according to Synergy Research Group.

This year has seen nearly $31bn in data center deals close, significantly up from 2019's $15bn.

Fish acquisition Equinix Telecity Interxion
– Thinkstock / KaeArt

And it's still rising

The $30.9 billion sum was realized through 113 acquisition deals, despite the inevitable delay to a number of deals caused by Covid-19 - with more set to be completed before December 31st. For example, today saw DataBank's acquisition of zColo close, while Synergy's report only tracks up to the end of November.

The largest single deal was Digital Realty’s acquisition of Interxion for $8.4 billion - a deal struck last year but that closed in the first quarter of 2020 - but this was boosted by a number of other transactions worth more than $1 billion, as well as a $2 billion secondary share listing.

Throughout the 2015-2020 period, Digital Realty and Equinix were by far the most prolific investors, with massive deals under their belts including the $7.6 billion Dupont-Fabros merger in 2017 and Equinix’s acquisition of Verizon’s data centers for $3.6bn and of Telecity for $3.8bn. Other acquisitive companies include Colony, CyrusOne, GDS, Digital Bridge/DataBank, Iron Mountain, NTT, GI Partners, Carter Validus, QTS, and Keppel.

Synergy’s chief analyst John Dinsdale called 2020 a “bumper year” for data center M&A activity, adding: “We are also aware of almost $7 billion in deals and IPOs that are at various stages of closing, so the pipeline remains robust despite the flurry of activity in 2020. This drive to find new sources of investment capital is being fueled by an almost inexhaustible demand for data center capacity."

Demand for data center services has done nothing but grow this year, a trend which was already in motion in 2019 but was compounded by the pandemic.

Data center construction flourished this year - again, despite inevitable roadblocks caused by the pandemic.

This was a point made by analysts at DCD’s recent European conference, where research director for data centers at property giant CBRE, Penny Madsen, explained that the European market for data center construction grew beyond all expectations in 2020, and that the trend is likely to continue well into 2021 as operators work their way through the backlog of projects slowed down by Covid-19 - a trend can expect to see in other regions most affected by the pandemic, such as the Americas and some parts of APAC.