Kalawin - stock.adobe.com
The amount of colocation space being consumed by the hyperscale cloud giants in Europe is on course to drastically increase before the end of the year, predicts real estate consultancy CBRE.
The organisation’s latest quarterly colocation market tracker report states the hyperscalers are ramping up how much space they are willing to take on within the major European datacentre hubs of Frankfurt, London, Amsterdam and Paris (FLAP), as the demand for cloud services across the continent continues to grow.
“A significant trend in the four major FLAP markets is an increase in commitment sizes by hyperscale cloud companies,” the document states.
While the hyperscalers have previously been content to expand “2-3MW” at a time, they are now looking to build out their capacity at a much faster rate, the report continues. “Indeed, we expect to see double-digit transactions in the FLAP markets before the year is out,” it adds.
In the first half of 2018 alone, 87MW of datacentre capacity was taken up across all four cities, which marks another record quarter for the colocation industry, CBRE’s data shows.
“London and Frankfurt were responsible for over 30MW of take-up each in H1 2018 as cloud companies again dominated activity in the European markets,” it reads.
The hyperscale cloud giants, which include the likes of Amazon Web Services (AWS), Microsoft, Google and Facebook, are regularly credited by analysts for being the major driving force behind how much growth the colocation market has seen in recent years.
Read more about colocation and hyperscaler trends
- As the take-up and supply of datacentre capacity across Europe continues to hit new heights, CBRE claims the colocation market is entering a phase where high growth is becoming the “new normal”.
- With the hyperscale cloud giants showing a growing willingness to build and own their own datacentres, where does this leave the colocation community? Panellists at Datacloud Europe 2018 give their verdict.
However, as the CBRE report alludes to, there are concerns over how long this trend is likely to continue for, with some operators fearing the hyperscalers might – once they reach a critical mass – start building their own facilities in these regions instead.
“The question of whether the hyperscalers will continue to procure this sustained level of colocation capacity over the medium-term or build their own campuses will determine the success of these colocation markets,” the report states.
For the time-being, the colocation market is continuing to bring more capacity online, in response to the appetite shown by the hyperscalers, with CBRE’s figures suggesting 95MW of new supply has become available during the first six months of 2018 alone. It is also forecasting that a further 82MW will be added to the supply pipeline by the end of the year.
Mitul Patel, head of Europe, Middle East and Africa (EMEA) datacentre research at CBRE, said the continued buoyancy of the colocation market means it remains an area of keen investor interest.
“Investors continue to be drawn to the data centre asset class because of the incredible growth of the European market. As opportunities for M&A are scarce, investors are utilising more creative means to deploy capital in the sector and development finance is one avenue open to them,” he said.
“Society’s reliance on digital devices and cloud services, and consequent need for data storage and processing, will only increase as the world gets smarter and more connected.”
“CBRE’s Portfolio 2040 research estimates suggest the amount of data that internet of things devices generate each day is doubling every 40 weeks; the effects of this are very evident in data centre activity in Europe,” said Patel.
Read more on Infrastructure-as-a-Service (IaaS)
CBRE: Record colocation take-up will fuel growth of secondary European datacentre hubs
Ramp-up in hyperscalers’ datacentre spend in Q3 puts 2019 on course to become record-breaking year
Record-breaking colocation take-up across Europe prompts renewed space availability concerns
European colocation market set for another record-breaking year, but London market growth slows