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Data centre markets in LDN, PAR, AMS and FFM flourishing – but who’s best?

By Ashton Young
Thu 24 Aug 2017
FYI, this story is more than a year old

CBRE has released its findings from the second quarter of 2017 (Q217), revealing a strong pipeline of new supply as the market moves forward in leaps and bounds.

The report focuses on the key markets in Frankfurt, London, Amsterdam and Paris (FLAP), which underwent a 20 percent in new colocation supply across the board.

Staggeringly, one-sixth of all colocation supply in these markets has been brought on in the last 12 months alone and CBRE says the levels of new supply show no signs of abating as a number of further schemes are scheduled for the coming quarters.

According to CBRE, Q217 is only the fourth quarter on record to see more than 30MW of take-up across the four markets, placing 2017 ahead of 2016 for the equivalent H1 period.

However, for the year CBRE forecasts 120MW of take-up (which is lower than 2016) because the industry is unlikely to see the same level of build-to-suit transactions this year.

Q217 saw for the first time ever the FLAP markets breaching a combined 1,000MW in total supply, with 173MW of new supply being brought in the markets over the last 12 months alone – a stark contrast from the 53MW in the 12 months prior.

A large proportion of the 36MW of new supply in Q2, according to CBRE, came from two wholesale digital facilities – Digital Realty launched its new 12MW facility at de President Business Park in Hoofddorp, Amsterdam, while Gyron provided an extra 10MW to the London market with the second building at its Campus site in Hemel Hempstead.

CBRE has predicted that we will see 57MW more supply than take-up in the second half of 2017, which would mean 223MW of vacant supply across the four markets. This would make it the highest amount of vacant MW on record, therefore ending 2017 with an aggregate vacancy rate of 19.7 percent across the FLAP markets, an increase of 16 percent of the current rate.

Take-up across FLAP during Q217 was 31MW, reaching 58MW in total for the first-half of the year. This represented the highest first half of any year on record, surpassing the 55MW in H1 2016.

London was again the top performing market in Europe with 15MW of power sold in the city during Q2 with take-up dominated by wholesalers.

Amsterdam bounced back from a quiet Q1 with 10MW of colocation take-up – contrasting London with 70 percent sold in retail facilities.

Frankfurt and Paris both saw less than 6MW of take-up each in the first half of this year, however, CBRE given the cyclical nature of demand from the hyperscale cloud companies, CBRE expects to see an increase the rate of take-up once these companies turn their attention back to these two markets.

All four of the markets are set for positive growth in the coming months, CBRE asserts, as take-up rates continue to rise in line with digital transformation.

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