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CBRE: Cloud drives Q3 demand for colocation space in Frankfurt and London

CBRE’s third-quarter datacentre market tracker highlights soaring demand for colocation capacity in Frankfurt and London, as cloud providers court European enterprises

The European colocation market experienced its strongest performance on record during the third quarter of 2016, buoyed by demand for datacentre space in Frankfurt and London.

According to CBRE’s Q3 European Data Centres report, 24.7MW of space was taken up in Frankfurt, London, Amsterdam and Paris (FLAP) during the three months to the end of September.

This not only marks the quarter as the market’s strongest performance on record, but also means 2016 is on course to become the year with the highest-ever annual take-up rate – 79.6MW – even without taking the fourth quarter’s contribution into account.

“Take-up to date in 2016 is already 17MW higher than for the full year in 2015 and a staggering 38MW higher than at the Q3 stage last year,” says the report. “It is also 27% higher than the five-year average for annual take-up between 2011 and 2015.”

The previous record for annual take-up rates occurred just before the 2008 global financial crisis, when 77.6MW of power was taken up over a full year, the report notes.

Most of the market growth chalked up in 2016 can be attributed to the performance of the Frankfurt market, which recorded the highest-ever annual take-up of any European market, with 30.3MW consumed this year alone.

This has come on the back of strong performances from several major colocation firms in the city, including E-Shelter, Interxion and Zenium, the report notes, and has contributed to Frankfurt’s supply of vacant datacentre space being at its lowest level for two years.

London also emerged as a high-performing market during the third quarter with 7MW of take-up, bringing its year to-date total to 28.7MW.

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But the growth of the Frankfurt market means London will have to achieve a much larger take-up of datacentre space during the last three months of 2016 to retain its position as Europe’s top-performing city.

“London’s level of colocation supply grew to 384MW at the end of Q3 and, over the course of 2017, London should be the first European market to break the 400MW mark for colocation supply,” says the report.

About 13MW of new colocation supply came online in London during the third quarter, as a result of Telehouse’s North 2 facility opening in Docklands and the availability of extra capacity at Equinix’s LD6 site in Slough.

Andrew Jay, executive director of CBRE’s datacentre solutions team, said the European market was feeling the benefit of rising demand for colocation space from the cloud service provider community.

In line with this, CBRE predicts annual take-up will exceed 100MW in the fourth quarter, on the back of demand for colocation from cloud providers, which would represent a 30% yearly increase over any other year.

“There has never been so much widespread interest in the datacentre industry,” said Jay. “The amount of colocation space acquired by the cloud service providers in Frankfurt has been staggering and indicates how the cloud and the internet of things have become so integral to everything we do in society.”

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