Report finds co-location vacancies on the rise
Retail co-location vacancy rates are rising in a reversal of trends seen over the past two years, according to a new report.
Research firm TeleGeography said that co-location site availability increased in a number of metro areas between September 2011 and September 2012, with vacancy levels rising from 10% to 34% in Hong Kong and 21% to 36% in Los Angeles.
Co-location vacancies also increased in London from 17% to 28% last year, but despite this, over 70% of operators surveyed by TeleGeography said they will continue to add co-location capacity in the city in anticipation of demand growth.
The analyst noted that three new data centres with more than 160,000 square feet of floor space are scheduled to enter service in London before the end of 2012.
Similarly in Los Angeles, co-location vacancy rates increased 15% in 2012 but nearly 80% of sites surveyed planned to expand available capacity.
“Increased vacancy rates do not necessarily portend a long-term supply glut,” said Jon Hjemb, analyst at TeleGeography, “nor are operators’ continued expansion plans clear evidence of irrational behaviour. In some markets, including Hong Kong and Los Angeles, increased vacancy rates simply reflect the introduction of one or two unusually large new facilities.”
“Moreover, given the long lead times required to build new co-location facilities, operators must begin developing new sites well before their existing facilities are full. Despite the increase in vacancies, demand for co-location services remains strong,” said Hjembo. “In fact, co-location sites built in the past two years are filling at a faster rate than comparable sites were last year.”