The focus is on Frankfurt

In the first quarter of 2015, Frankfurt (8.3 MW) accounted for half of the total European take-up (16.3MW) which already represents almost half (48%) of the city’s total take-up in the whole of 2014. This year, Frankfurt has also been responsible for the majority of new data centre supply across Europe.

Mitul Patel, Associate Director, Research - EMEA Data Centre Solutions, at CBRE explains: “Frankfurt has seen year-on-year growth in take-up for the last 5 years and this shows no signs of abating in 2015. The financial capital of Germany has become an increasingly attractive option in the European colocation market, through a combination of data protection regulation, excellent connectivity and its geographical position as an ideal strategic base between West and East Europe.”

In contrast, London has continued to struggle in the early part of 2015. Last year, and for the first time in a decade, the English capital was replaced at the top of the colocation data centre take-up table by Amsterdam. However, with three quarters of available space in wholesale facilities, one or two deals could significantly alter this trend.

Andrew Jay, EMEA Head of Data Centre Solutions, at CBRE commented: “The size and scale of the data centre industry keeps expanding at pace. This is reflected by recent heightened industry M&A activity with news of Equinix, the global data centre group agreeing to purchase UK based TelecityGroup for £2.35 billion. The expectation is that we will see more investment activity and consolidation amongst European data centre operators in the coming months. Crucially, this mirrors the long term growth trajectory of the sector given it underpins and drives industry and business at large.

“In addition, the level of new colocation data centre supply coming to market has outstripped take-up for over a year in Europe which has led to an overall increase in available data centre capacity. In some respects, this reflects increased self-assurance from operators confident of filling the data centre space on offer. The current market anomaly is Amsterdam where available space has dropped to 25.3MW of space to let. Given the Dutch capital saw 22.3MW of take-up in 2014, there is a real fear that such a shortage in supply could lead to all space being filled in the next 12-18 months, which in turn could lead to price increases as competition intensifies. Whereas, London could experience the opposite challenge with current absorption rates providing market intelligence that the capital has over 3.5 years of available data centre space left.”