01 December 2017
| Natalie Bannerman
Colocation power has hit a Q3 YTD (year to date) record of 86MW across London, Frankfurt, Amsterdam and Paris, causing a surge in investment in the sector.
According to data from CBRE, the
global real estate advisor, M&A investment in datacentre
will reach a staggering $20 billion by the end of 2017.
2017 has been a remarkable year for colocation in Europe",
said Mitul Patel, head of EMEA data centre research at CBRE.
"And, with 2018 set to follow-suit, any
thoughts that 2016 might have been a one-off have been allayed.
We have entered a 'new-norm’ for the key hubs in
Europe, where market activity is double what we have been
accustomed to in the pre-2016 years."
Additionally much of this new supply is down to investors
attempting to capitalise on the demand in a sector where
speed-to market is key. Across the four markets 20% of the
supply has been brought on over a single year. And projected at
195MW for the full-year, equates to a capital spend of over
£1.2 billion ($1.6 billion).
"Given this ongoing market activity, it is no surprise to
see so many investors wanting a piece of the action in Europe.
As demand for data centre capacity continues to entice
investors, the pool of available companies and assets
diminishes. Consequently, those looking to deploy capital in
Europe will need to act decisively, leading to more M&A
investment in the coming year, beginning in Q4," added
London in particular has been the hub for data centre
activity in Europe throughout 2017, and its 1MW of take-up in
the Q1-Q3 period represents 48% of the European total. Through
the course of the year it was also the location for two key
investments in the sector. In Q3 as Singapore’s ST
Telemedia acquired full control of VIRTUS and Iron Mountain
acquired two data centres from Credit Suisse, one of which is
Looking ahead CBRE predicts that market activity will
continue into Q4 via three main ways; the first being strong
demand and significant moves into the market from the Chinese
cloud and telecoms companies, secondly forecasts that 80MW of
new supply will come online in Q4, including new companies such
as datacenter.com, KAO and maincubes, and lastly continued
investment activity, with at least one major European
investment closed out by the end of the year.
"Furthermore, the low cost of capital available to large
data centre developers, and a shift from private equity to more
longer-term institutional and infrastructure investors, will
mean that both investment volumes and prices paid will remain
at historically high levels," concluded Patel.