2017 proved to be a second consecutive blockbuster year in the four largest European data centre markets of Frankfurt, London, Amsterdam and Paris, according to new research from CBRE.
European data centre activity was once again double that of each of the five years prior to 2016, said CBRE, cementing the ongoing trend.
'2017 has shown that the heightened level of activity across the European data centre markets is here to stay,' said Mitul Patel, head of EMEA Data Centre Research at CBRE.
'In 2018, this level of activity will continue to be driven by the hyperscale companies which continue to use data centre providers to increase their capacity in the major cities. We may also see more build-to-suit style transactions in the major markets.'
Supply increasing
The year saw a 21% increase in supply across the four major markets of Frankfurt, London, Amsterdam and Paris. This equated to a record 202 megawatts (MW) of new data centre capacity, 70 MW more than any other year on record, underlining the enormous confidence in the sector.
CBRE has also identified 180 MW of supply scheduled to come online in these markets during 2018.
in total, there was 119 MW of total take-up across these four markets, in-line with CBRE’s prediction from Q2 that the full-year would see 120 MW. This demand was again predominantly driven by cloud companies, with London benefitting most; the UK capital was responsible for 45% of total take-up across the four major markets, equating to 54 MW.
CBRE expects another strong year for demand in 2018 and we are predicting over 100 MW of take-up for the third-consecutive year.
M&A activity
Global data centre mergers & acquisitions were a key feature of 2017, according to CBRE. Globally there was over $25 bn (€20 bn) worth of M&A in the sector, over three times the 2016 level, with several key transactions in Europe. CBRE expects this trend to continue into 2018 as the weight of capital wanting exposure to the European markets remains high.
'We also expect that 2018 will be the year that sees the first significant activity from the large Chinese tech companies procuring significant data centre capacity in Europe, with several already engaging in active searches,' added Patel.
'This elevated market activity will only increase investor appetite for exposure to the European markets; and this demand will keep prices at historically high levels.'
