A recent report from commercial real estate firm CB Richard Ellis (CBRE), predicts solid and continued demand across
Its latest numbers, covering the first three quarters of 2008, show that take-up of data centre space was just shy of the record levels set in 2007, reaching 93,080 square metres across the ‘Tier 1’ markets:
And while take-up in the third quarter was down from the second quarter, it was still up 25% on the year-earlier period.
Corporate customers were responsible for 52% of market activity, driven by the push to increase savings by consolidating data centre holdings. Corporates were followed by the technology sector itself at 33%, retail transactions (individual letting smaller than 185 sq m) at 14%, and system integrators at 1%.
The report also observed that while demand “continues to remain buoyant in
Overall availability in the
As elsewhere in Tier 1 markets (see graph) once-tight vacancy rates are improving. The vacancy rate I London increased this quarter from 22.7% to 27.0%.
The CBRE report claimed that green issues remained “at the top of many IT directors’ agendas”, citing research by analyst firm IDC suggesting that “cost cutting was the number one reason firms looked to energy efficient technologies, such as virtualisation,” and that “nearly half expect to have a solid return
CBRE acknowledged that while the figures appeared better than might be expected, the full effect of the financial downturn on the data centre market is yet to be felt, with 2009 figures expected to be less radiant.
CBRE’s head of technology for EMEA Andrew Jay said the while the market for data centre real estate, as a vehicle for rationalisation, would remain insulated from the crash befalling the residential sector, it would not be immune. “We do expect a drop in data centre demand in 2009, however we do not expect it to plummet, nor do we envisage it will experience the level of decline that other real estate sectors will because strong drivers still remain,” he said.
However overall market sentiment continues to be “sustained” and “positive”, his report noted, with “carrier-neutral co-location providers, integrators and carriers all providing evidence of optimism towards general corporate demand, and newly-announced development schemes showing that the data centre market is increasing its profile amongst real estate developers.”