Data centre ghost town

The scarcity of data centre resources in London has been well documented in previous issues of Information Age, as well as the present one.

Both power and floor space are in short supply as City organisations struggle to expand their server farms without suffering the lag times associated with data centres outside the M25.

Surely, then, real estate agents in the data centre market must be beating clients off with a stick?

Not according to new research from real estate adviser CB Richard Ellis, which found that the number of new data centre locations acquired by companies (rather than hosting providers) during the first quarter of 2008 was precisely zero. And acquisitions by hosting providers in London were the lowest since records began.

This is particularly surprising given that the capital is usually top of the charts among European cities.

The reason for this fall in data centre property deals, the company concluded, was the credit crunch. Financial services firms in the City are facing uncertain times and are freezing IT investment.

“London has been significantly affected by the current financial climate due to the large number of financial services companies in the market,” said Andrew Jay, head of CBRE’s technology practice group.

He added that a return to form is expected. “There are a number of large deals that will come to fruition in 2008,” said Jay, “and while we will not see the same levels of take-up as last year, which was a record-breaking year, we do expect levels to exceed those of 2005 and 2006.”

Elsewhere, data centres are in bloom. Frankfurt, for example, saw 60% of the total data centre take-up across all the European Tier 1 destinations.

“The European data centre market appears to be showing some signs of resilience compared with the overall real estate market,” said Jay.

Further reading

Future of the Data Centre 08
Data centre imperatives. A report from Information Age‘s Future of the Data Centre conference

Find more stories in the Data Centres Briefing Room

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

Related Topics