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November 27, 2015

London remains top colo market in 2015

News: UK capital leads Frankfurt, Amsterdam and Paris.

By Joao Lima

Cloud demand and the recent European Commission ruling on Safe Harbour has led the data centre industry through some steady growth within the EU, and especially the UK.

So far this year, the colo market has grown nearly 6% with large-scale IT and web companies moving their infrastructure to the UK, mainly to and around London.

This has led London to remain a prominent EU leader in the industry in terms of IT power over Frankfurt, Amsterdam and Paris – the following biggest markets, according to CBRE.

Mitul Patel, associate director at CBRE, told CBR that the London capital represents over 40% of total data centre supply across the major European markets.

He said: "Operator confidence in the London market has been evident in 2015 with a substantial amount of new supply coming live in the least year. London has cemented its place as the dominant market in Europe."

Total power supply in London for Q3 2015 has reached 354MW, compared to 153MW in Amsterdam, 181MW in Frankfurt and 127MW in Paris. In Q3 2014, London had 337MW, Frankfurt 163MW, Amsterdam 137MW and Paris 125MW.

The European Tier 1 collocation market has seen supply increasing to 816MW in Q3 2015, compared to 761MW in Q3 2014.

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London has also seen a 4.8MW take-up in Q3, the highest across the continent. This has given the capital a collocation take-up of 16.1MW for the whole year so far, close to last year’s 18MW. However, a strong Q4 is still needed to reach London‘s five-year average of 22MW.

Collocation take-up comprises data centre space sold at retail and wholesale collocation facilities.

CBRE believes that in terms of take-up, Europe as a whole will also need a particularly strong fourth quarter to reach the 60MW level of annual take-up, which is considered par for the major markets.

Collocation take up was down to 9.9MW last quarter cooperated to 17.9MW in Q3 2014. Take-up on a year-to-date basis has fallen from 55.4MW last year to 41.7MW of IT power sold in the FLAP markets this year, with one more quarter still to go.

Overall take-up for Q3 2015 was down due to Amsterdam worst quarter since Q4 2010.

In terms of availability – retail availability of space based on fully fitted space, vacant and available to sell – London is also a leader. With 81MW of availability in Q3 2015, it beats Frankfurt (38MW), Amsterdam (27MW) and Paris (16MW).

Patel said: "This demand [in London] has been driven by IT Infrastructure companies turning their attention towards London in the last six months.

"We expect this trend to continue as the year comes to an end with more large-scale deals by IT infrastructure players in London putting gloss on to what will be a successful year for the London market."

Andrew Jay, EMEA head of data centre solutions at CBRE, told CBR: "Q3 underlined just how much IT infrastructure companies are defining the European landscape. London has bounced back from a weak period of demand to seal almost 14MW of take-up in the last two quarters as a direct result of increased activity from IT Infrastructure firms."

He said that operators are now seeing proof that deploying an on-off ramp to the cloud in their data centre will attract enterprise customers so securing the IT Infrastructure providers to their premises is becoming vital.

The European data centre market is set to grow almost 20% from the end of this year to the end of 2020 with the UK remaining as the largest single market.

The UK data centre space is forecast to have over 669 MW of data centre power and 635,000 m2 of space (nearly seven million sqft) by the end of 2015, according to Tariff Consultancy.

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