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FOCUS INVESTMENT


Issue 1, December 2008


Continued demand in the crunch The CB Richard Ellis survey of European data center activity revealed a mixed summer bag


C


arrier neutral collocation suppliers appear to remain buoyant, but announcements of data center expansions across the European


landscape have been limited over the last three months. The first quarter of 2008 saw a number of reports of large data center development projects in the pipeline but since then European developers and investors have been quiet over the summer quarter. There is strong evidence of the continued expansion aspirations of carriers and IT services companies across the broader European data center landscape. Power how to get it, pay for it and use it efficiently appears to be the single pre-occupation across the data center industry.


The three months since July saw a limited number of reports of new space being fitted out or planned by carrier neutral collocation operators across Europe, and most of these were in the UK market (away from Central London).


In Europe, Telecity Group is planning a Milan data center, its second in the city, to deliver approximately 20,000 sq ft and over 2.5 megawatts of customer capacity to the market in the first half of 2009. Magyer Telekom in Budapest, is expanding its carrier neutral Dataplex facility from 18,000 sq ft to 47,000 sq ft, at a cost of €18 million.


In the UK Telehouse will develop an extra 13,000 sq ft before its planned £80 million Docklands investment comes to fruition in 2010. Rapid Switch is building a Maidenhead facility for housing up to 600 racks from the second quarter of 2009. Network I is about to open a 10,000 sq ft facility in Slough. Iomart finished its eight month upgrade of 4,500 sq ft floor space in Nottingham.


MARKET FOCUS


LONDON After a slow start to the year, take-up picked up considerably in the London market in Q2. Take-up was 34,440 sq m which represents a significant increase on the previous quarter’s 1,190 sq m and is the third highest recorded take-up since 2004. 80% of this take-up was driven by a large wholesale shell transaction (27,410 sq m). Of the remaining 20%, 5,990 sq m (17%) was in the Carrier Neutral Hotel market and 1,040 sq m (3%) was in threat stock. The majority of the 34,440 sq m of


60 www.datacenterdynamics.com


take-up was apportioned in the corporate sector (30,620 sq m, 89%) with the remaining being made up of 2,250 sq m (6%) from systems integrators, 990 sq m (3%) of retail transactions, and 580 sq m (2%) from the technology sector. Following Quarter 1, we have seen growth in both the shell and CNH markets with continued demand for space across all tenant categories. We expect to see continued growth in CNH market take-up, and potentially more wholesale shell deals in the second half of 2008.


FRANKFURT Take-up in the Frankfurt market was 5,550 sq m, a drop of 5,630 sq m on the previous quarter. All of this take-up was apportioned in the CNH market. Although this is a sizeable decrease on the previous quarter, the Frankfurt market had the second highest take-up of the five tier 1 markets and is still showing a healthy take-up rate which looks to be sustainable in the long term. Over the last 24 months, the average quarterly take-up has been 7,835 sq m. In terms of the 5,550 sq m of reported take- up, 2,250 sq m (41%) was in the technology sector, 1,680 sq m (30%) was to corporates, 1,190 sq m (21%) was to system integrators and 430 sq m (8%) was in retail transactions. Total availability was down by 14% on the previous quarter from 41,010 sq m to 35,380


sq m. Of this availability, 21,940 sq m (62%) was fully-fitted stock, 6,740 sq m (19%) was central services stock and 6,700 sq m (19%) was shell & core stock. A significant amount of fully-fitted availability is in one building – Data 110. The vacancy rate continued to drop with a 21.32% vacancy rate compared with 39.92% in the same quarter of last year. Once the Data 110 facility has been taken, this would take the total market vacancy rate to well below 20%. This is the level where, as we have witnessed in other tier 1 markets, the building of new facilities takes place.


AMSTERDAM In Quarter 2 we saw an increase in take-up on the previous quarter of 2,270 sq m from 450 sq m to 2,730 sq m. The majority of this take- up was apportioned to the CNH market (2,650 sq m, 97%) with 80 sq m (3%) of take-up in the threat market. Of the take-up in the CNH market, 1,320 sq m (50%) was to corporates, 910 sq m (34%) was to the technology sector and 420 sq m (16%) was in retail transactions. Total availability d ropped from 10,280 sq m in Quarter 1 to 7,650 sq m in Quarter 2. The available space was apportioned as follows: 5,300 sq m (69%) of fully-fitted space and 2,350 sq m (31%) of central services space. The vacancy rate in Quarter 2 stood at 14.55%, but this will increase next quarter as new CNH stock is brought to market.


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