Hyperscale cloud giants look to pick up the pace of self-built datacentres in London

An uptick in the self-build activities of the hyperscale cloud giants in London has been flagged as a notable development in the second-quarter datacentre market tracker published by analyst house DC Byte.

The company’s Q2 market tracker data, published in partnership with real estate consultancy Knight Frank, holds up both London and Dublin as locations where notable amounts of development have taken place during the quarter.

The Dublin market, which is dominated by self-built hyperscale datacentre developments, saw 146MW of capacity come online during the quarter, while London experienced growth of 122MW over the same period.

“For Dublin, this is a significant expansion, almost matching the total for 2020, and higher than the Q1 expansion at just over 100MW,” said DC Byte in a statement.

The London market is primarily influenced by the expansion activities of the colocation market’s various players, whose capacity is leased by the hyperscalers to stand up their cloud and internet services.

“London’s growth in Q2 2021 matched the pace of Q2 2020 growth,” said DC Byte. “London’s take-up in the same timeframe was 25MW, demonstrating the strength of a colo-dominated market alongside the agility of progressing planned development.”

However, the DC Byte data suggests the US hyperscale public cloud giants are increasingly looking to build their own datacentres in London, based on the fact that Amazon Web Services (AWS) and Google have both acquired land for datacentre builds in Berkshire and Hertfordshire, respectively, in recent months. “This marks a significant shift in market dynamics,” the company added.

Ed Galvin, founder and CEO of DC Byte, said the report’s data also continues to highlight how datacentre development outside the traditional hubs of Frankfurt, London, Amsterdam, Paris and Dublin (FLAPD) is continuing to accelerate.

“We expect the trend toward expansion across EMEA [Europe, Middle East and Africa], outside of FLAPD, to continue,” said Galvin.

“On the hyperscale horizon, 2021 will see facilities in seven markets come online as Belgium, Denmark, Finland, Spain and Sweden all add capacity, in addition to the core markets of Amsterdam, which is rapidly evolving into both a colocation and enterprise hyperscale location, and Dublin. This is a record for a single year. Istanbul and Warsaw are other ‘edge’ markets to keep an eye on.”

Stephen Beard, partner and co-head of global datacentres division at Knight Frank, said the buoyancy of the datacentre market is also continuing to fuel investor interest in the space.

“The datacentre landscape continues to evolve rapidly as operators compete to secure land, develop new sites and increase market coverage,” said Beard.

“Investor interest is rising as a result, buoyed by escalating market activity and the predicted future growth trajectory of the sector. Datacentres can realise higher returns than traditional real estate classes and, as such, are firmly an asset class that is now attracting wider investor recognition.”