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Cloud demand fuels record European growth for colocation market in 2016, confirms CBRE

CBRE’s full-year colocation tracker data confirms record take-up for colocation space across Europe in 2016

The growing demand for cloud services contributed to record amounts of colocation space being acquired across Europe throughout 2016, confirms CBRE.

The real estate consultancy’s latest quarterly colocation market tracker charts how the supply and demand for colocation space across the four major European markets – Frankfurt, London, Amsterdam and Paris – panned out over the course of 2016.

In line with CBRE’s earlier predictions, 2016 is now confirmed as the being the best year since records began for colocation take-up across Europe with 155MW of space becoming occupied.

To put that figure into context, that is double the amount of take-up recorded during the whole of 2015, and is considerably higher than the previous full-year take-up record of 78MW, which occurred in 2008.

In the fourth quarter of 2016 alone, 75MW of take-up was recorded across the four major European markets, with Amsterdam emerging as the most sought after location with 54MW of take-up over the course of 12 months.

That marks Amsterdam out as the first market in history to secure more than 50MW of take-up in a single year, with London not too far behind with 49MW, followed by Frankfurt (34MW) in third place.

By comparison, Paris saw markedly less being acquired, with 17.6MW over the course of the year. That is still, however, seven times more than it accrued in 2015, when just 2.5MW of space got occupied.

In percentage terms, therefore, Paris saw the largest increase in take-up of any other European market.

Andrew Jay, executive director of Data Centre Solutions at CBRE, described the levels of cloud services being acquired through 2016 as “totally unprecedented”, before suggesting there could be lots more to come.

“Over the course of 2016, all four markets saw more take-up than they each did in the previous two years combined. The numbers are quite astounding,” he added.

Read more about colocation market trends

In terms of what is driving demand for colocation space across the continent, CBRE cited the growth activities of hyperscale cloud providers, as they scramble to build out their European datacentre presence.

“Cloud continues to dominate the landscape, with 70% of deals coming from this sector. These hyperscale cloud deals that once would have been unusual became the norm,” said Jay.

According to CBRE’s report into the figures, many of the colocation sites the hyperscale cloud firms are moving into are “build-to-suit” facilities, whereby landlords have tailored their designs to their specific business requirements.

“We predict that cloud take-up will continue to increase in size as more hyperscale providers turn to large-scale build-to-suit facilities as an effective speed to-market option,” he continued.

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