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London datacentre market enjoys pre-Brexit surge in demand for colocation space

CBRE's pre-Brexit look at the European datacentre market sees London reap the benefits of a surge in demand for colocation space during the second quarter

Caroline Donnelly
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Published: 24 Aug 2016 10:39

The London datacentre market had a storming second quarter, with operators reporting the highest rate of take-up ever seen in their facilities.

According to CBRE’s quarterly review of datacentre supply and demand in Frankfurt, London, Amsterdam and Paris, a record 35.5MW of power was collectively taken up by users during the three months to 30 June.

London accounted for 15.8MW of the take-up, with CBRE citing the growing demand for datacentre space from UK public sector organisations as a key factor.

“We saw a significant amount of take-up from institutional-type organisations, which marks a shift from previous quarters, when nearly all the demand came from IT infrastructure companies,” said CBRE’s second-quarter report.

“Ark was symbolic of this strong demand, benefiting from increased government leasings as part of the Crown Hosting contract. This activity has helped turn a very good quarter into a record quarter.”

Frankfurt recorded take-up of 10.5MW during the quarter, while Paris saw a surge in demand for datacentre space, with 7.4MW of power consumed.

Although the Paris figure is lower than those reported for London and Frankfurt, it represents a revival in demand for datacentre space in the French capital, which has previously proved relatively downbeat.

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CBRE’s data suggests the second-quarter turnaround in take-up is higher than the Paris market achieved during 2014 and 2015.

“The increased take-up in Paris is a result of France’s overall economic strength, its strategic geographic location for southern Europe and Africa, a stable power network and beneficial power pricing,” the CBRE report said.

The Paris market also has plenty of room to grow, should the demand for colocation space in the region continue to rise.

“There is a healthy amount of unfitted space in the market that could be brought online relatively quickly, so the Paris vacancy rate reaches a much healthier level on a par with any other major market in Europe,” the document added.

Counting the cost of Brexit

CBRE’s tracking period for the sector ended around the time of the UK’s EU referendum, which means the impact of the Brexit vote on demand for London-based datacentre space remains to be seen.

However, datacentre market watchers have told Computer Weekly how the vote to leave the EU has prompted a marked slowdown in overseas investment in UK datacentres in the past couple of months.

This, it is claimed, stems from the uncertainty surrounding how leaving the EU will affect the free flow of data between the UK and other member states.

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