London and Frankfurt lead data centre demand

Colocation take up in Frankfurt highest for four years; London colocation take up records 26% annual rise.

  • Wednesday, 26th February 2014 Posted 10 years ago in by Phil Alsop

Improved macro-economic sentiment across Europe is enabling corporates to shift from a position of constraint toward one of growth and this, combined with consistent cloud driven enquiries, is resulting in increased demand for data centre services. Across the five key markets of London, Frankfurt, Amsterdam, Paris and Madrid, 19,461 sq m of data space was transacted in the fourth quarter of 2013, the highest quarterly co-location take up figures for the year and almost half of the full year total of 42,652 sq m.


In London, overall take up was 26% ahead of the total achieved in 2012 due to a returning retail market which has bolstered demand with the award of several large contracts to wholesale providers. The latest research from CBRE, the global real estate advisor, indicates that improved economic data is providing the stimulus giving corporate occupiers the confidence to explore technology opportunities to correctly equip their business in anticipation of an upturn.


Alongside London, Frankfurt has consistently seen strong market interest in 2013 benefitting from its position as a strategic connectivity hub. Vacant space is now at an all-time low in the city evidenced by total take up rising 20% during the year to reach 11,377 sq m at year end, the highest total for four years. Alongside returning corporate enquiries, connectivity driven occupiers such as internet service providers, cloud and digital media are bringing new requirements to market in order to service growth markets further East.


Across the other three key markets, data centre activity is expected to increase in line with positive improvements in economic data. Currently, Amsterdam is yet to reach the record levels seen in previous years however considerable focus remains on the Dutch capital and this is expected to translate into improved take up in 2014. In both Madrid and Paris the wider economic challenges of 2013 have continued to weaken occupier appetite.
Andrew Jay, Executive Director, EMEA Data Centres, CBRE, commented: “Broad improvement in the macro-economic outlook has seen an increased number of market enquiries for data centre providers in recent months. Alongside improved economic sentiment, the greatest shift in demand across all markets remains the burgeoning impact of cloud technology. Corporate end users are now incorporating cloud into IT strategies which is creating new business opportunities for data centre operators given the increased capacity requirements.


“The overall improved picture is encouraging to see and it’s no surprise that London and Frankfurt continues to lead demand with their collective position as strategic business hubs. As this new demand begins to translate into confirmed transactions, we expect this trend to continue in 2014 in line with continued positive economic data.”