European data centre markets set to grow by 15% in 2018 - CBRE

Europe's leading data centre market London has broken the 500 megawatt (MW) mark - a first for any European city, according to new research from CBRE analyising the health of Europe's data centre market.

With around 147 MW of new supply projected across the Continent's leading markets for the remainder of 2018, activity is higher than ever before, CBRE said.

The four markets of London, Frankfurt, Amsterdam and Paris have already been responsible for 36 MW of take-up in the first three months of the year, the highest figure for any Q1 period and a 35% increase on Q1 2017.

'2018 provided the start to the year that we had projected, with significant activity on both the demand and supply side,' said Mitul Patel, head of EMEA Data Centre Research at CBRE.

'We expect to see this continue and to see an upturn in demand from enterprise companies, such as those from the automotive sector which begin to execute strategies around automation.'

A substantial amount of development is also evident in the four markets, in response to the heightened demand. CBRE analysis shows that if the further 147 MW of projected new supply is delivered in Frankfurt, London, Amsterdam and Paris, this will bring new capacity in the full year to 187 MW, an annual increase of 15%.

Because of the high level of new supply, vacancy rates in Europe have recently come back in line with what is considered as the equilibrium of 20% - after being low for two years. However, to maintain a 20% vacancy rate, there will need to be 117 MW of take-up in the next three quarters, at an average of 39 MW per quarter.

As so much demand continues to be driven by hyperscale cloud, the actions of this handful of companies will dictate whether European markets are in equilibrium or oversupplied by year-end, according to the research.

'Consequently, access to the European markets remains a priority for developers and this will drive further announcements of new companies entering the European markets throughout 2018. We may also see significant platforms come to market as investors look to cash in on the high barriers to entry that are driving up pricing,' Patel concluded.



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