cbre european data centers 2014 q2

8/11/2019 CBRE European Data Centers 2014 Q2

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CBRE Global Corporate Services

European Data CentresMarketView

STRONGEST H1 ON RECORD FOR EUROPEAN DATA CENTRES

Quick stats

Headlines

Highest H1 take-up recorded

Mid year take-up in Frankfurt morethan double that of H1 2013

H1 take-up in Amsterdam nowhigher than the total for 2013

Data centre expansion activityincreasing

In this issue

Executive Summary

Supply & Availability

Take-up & Demand

Market Focus

London

Frankfurt

Paris

Amsterdam

Madrid

Key Statistics

Definitions

A combination of stable letting activity in the second quarter and anexceptionally strong Q1 has resulted in colocation take-up for H1 reachingunprecedented levels. A total of 38MW was sold in the first half of 2014, 68%higher when compared than at the equivalent stage in 2013 and the highesttotal recorded for an opening six month period. Connectivity-led demandcontinues to be the principal source of larger transactions with cloud andassociated companies particularly active this year. A build-up of enterprisedemand is now also beginning to generate new market interest.

The highest take-up this year has been in Frankfurt and Amsterdam. InFrankfurt 13.2MW has been sold in 2014, more than twice the amounttransacted in the same period of last year. Take-up in Amsterdam nowexceeds that achieved in the full year of 2013. At mid-year a total of 11.7MWhas been sold, the highest H1 total recorded.

Across the markets, operators continue to make prudent investment decisionswith regards to new data centre capacity. At the end of the second quarter anadditional 44MW has been added to European supply in 2014 whichcompares to 30MW in the same period of 2013. This statistic indicates anacceleration in development of new capacity particularly focussed on thestronger markets led by both existing and new customer demand.

AVAILABILITY-3.7% y-o-y Jun 14

EXECUTIVE SUMMARY

AS AT QUARTER 2 2014

Supply 754MW

Availability 142MW

Colocation take-up

quarterly 10.8MW

Colocation take-up annual YTD 38MW

SUPPLY+9.3% y-o-y Jun 14

COLOCATION TAKE-UP+12.3%y-o-y Jun 14

EUROPEAN TIER 1 COLOCATION MARKET AS AT Q2 2014

Q2 2014

Beginning this quarter we have rebased our data centre market statistics andwill from this point report in power (Kilowatts kW and Megawatts MW) asour preferred standard metric. It is our opinion that this step will not onlyalign our market commentary with current industry reporting practices but

also facilitate analysis and comparison to other sources of available marketinformation.

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The sharp uplift of new data centrecapacity recorded in the first quarter hasnot been repeated in Q2 and although

several small additions have been madestronger letting activity has meant thattotal availability has fallen. Total supplyat the halfway point of 2014 amountedto 754MW of which 142MW wasavailable for customer purchase. Areview of availability recorded in recentyears suggests that despite the reductionin Q2, overall the current level remainshigh, and it is our opinion that surpluscapacity could sustain pressure onpricing in some areas.

Driving the higher level of vacancy is anincrease in the rate at which newcapacity is released to the Europeanmarket. As at the end of Q2 44MWhad been added to European supply in2014 compared with a total for the yearof 51MW in 2013. Increase in operatorbuild activity is for the most part beingled by stronger customer demand whichwill provide a counter balance tomaintain market equilibrium.

London currently has the highest level of

vacancy in Europe. Total availabilityrecorded at the end of the secondquarter has increased to 75MW ofcustomer power, a historic high. Thesignificant wholesale presence in the citysomewhat distorts this figure makingcomparison difficult.

COLOCATION MARKET HIGHLIGHTS

However, analysis of retail facilities inisolation indicates that although Londonstill has the highest amount of available

customer power, this remainsproportionate to annual levels of take-up.

The markets of Frankfurt andAmsterdam continue to attract particularfocus from operator investmentprograms in 2014. Both of these citiesare currently experiencing particularlystrong customer demand and this isencouraging a sustained series of newbuild out programs.

In the first six months of this year an

additional 8.6 MW of new capacity hasbeen released in Amsterdam, themajority coming with the opening of thefinal phase of Telecity's AMS 5 facility.In Frankfurt a further 11.5MW has beenadded with the acceleration ofInterxion's FRA8 contributing to this rise.Due to an increased level of customerorders however availability in both citiesremains consistent with 12 months ago.

Looking ahead, the developmentschedule over the coming 12 monthsindicates the completion of somesignificant schemes across the majormarkets. The rise in total capacity islikely to be close to 75MW.

Included in that is the first phase of theEquinix LD6 facility with a capacity of1,385 cabinets which is due to open in

the first half of 2015 and the new11MW Virtus facility at Hayes which isdue for completion by the end of thisyear. In Frankfurt the 4,400 sq msecond building of the e-shelterFrankfurt 3 campus is scheduled forQ1 2015 and Interxion expect the finaltwo phases of their FRA8 facility in thefirst half of 2015.

SUPPLY & AVAILABILITY

Charts 2 & 3: Historic Colocation Supply

Colocation Supply and Availability (MW) Colocation Supply Annual Increase (MW)

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SUPPLY & AVAILABILITYMARKET NEWS ROUNDUP

As leading economic indicators of growth, inflation andemployment data continue to point towards a morewidespread economic recovery across Europe, prospects for

the technical real estate market also continue to becharacterised by a degree of overall positivity. This ongoingbuoyancy of the data centre industry has encouraged newproduct to be delivered to the market during the secondquarter of the year as well as some significant requirementsbeing satisfied.

Both retail and wholesale colocation providers havecontinued to announce a series of openings and expansionsof data centres during the period. Indeed the boundariesbetween these two types of data centre provider havebecome increasingly blurred as both have become

increasingly willing to offer a product that has traditionallybeen the territory of the other.

Colocation provider, Interxionreported that it had broughtforward the delivery of two further phases totallingapproximately 2,600 sq m of equipped space at its AMS 7facility in Amsterdam, whilst in Frankfurt, it will acceleratethe completion of the two remaining phases of the FRA 8data centre to provide a further 1,800 sq m.

Elsewhere in Europe, Equinixannounced the start of fittingout its new ZH5.2 data centre project in Zurich which is setfor completion by the end of this year, whilst in Sweden,

DigiPlexreceived planning consent to build a 6,000 sq mtechnical facility on a former factory site in Upplands Vasby.When completed the facility will become Stockholm's firstdata centre offering over 20MW of power sourced fromrenewable hydro and wind, offering both retail andwholesale space.

In Estonia, Astrec Data is hoping to attract Russian ITcompanies to the new 1,600 sq m data centre it is buildingin Jhvi in the north-east of the country. Elsewhere in theBaltics, the Latvian data centre company DEACis set toinvest in a new facility to be built in Riga.

Being one of the strongest sectors driving the data centremarket over recent years, IT integrators, carriers and hostingcompanies continued to report expansions and new buildsduring the quarter. For example, in Italy, local ICT provider,Fastwebannounced plans to invest some 25 million in twonew data centres in Milan and Rome and in Scandinavia theUK hosting company Hydro66announced that it has madea significant investment in a data centre in Boden, locatedclose to the Arctic Circle in northern Sweden.

In the UK, Iomart opened a 1,500 sq m extension to itsMaidenhead data centre adding capacity for a further 630racks, Zen Internet completed the next phase of its North

West Data Centre, whilst Coltreported that it has expandedits Welwyn Garden City facility by 1000 sq m of technicalspace. In addition, the same company announced that itwould expand its Hamburg facility by a further 565 sq m.

In France, data centre group, CHOREUSDatacenterhasstarted construction of its new Paris area facility which it isclaimed will be the first such data centre to be powered by

trigeneration gas. The facility will eventually comprise 8units of 500 sq m technical floor space each, whilst TDGopened a new facility in Rennes and reported that it wouldopen a new data centre in Aix-Marseille later in the year.

Elsewhere, BTannounced the opening of its third 1,200 sqm data centre located in Rotterdam, whilst in Austria Linz AGTelekomopened a new 440 sq m facility and in Switzerland,Tochter Fiber Services, a subsidiary of Swiss power companyCKW, reported that it intends to open a new 1,200 sq mfacility in Lucerne which is expected to go online in mid2015. The data centre has already secured the Swiss insurer

Suvaas a tenant.

In Moscow, Russian mobile operator, MTSopened a new1,500 sq m data centre at a reported cost of some RUB 600million and in Poland, local telco 3Sexpanded its datacentre in Katowice and announced plans for a new facility inBytom whilst IT company, Qumakcompleted a new datacentre in the city of Grodzisk. In the Czech Republic, searchengine company Seznam.cz, has purchased a site on theindustrial park in the eastern suburbs of Prague, and intendto build a 2,500 sq m data centre.

Reports of development activity in the second quarter of the

year particularly on a speculative basis remain limited.Within the UK, for example, the main example to note sawScottish property company AOC Group submit its planningapplication for a 6,970 sq m data centre at QueenswayBusiness Park in Glenrothes, Fife.


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Take-up in H1 highest on record.

An exceptionally strong beginning to theyear followed by steady letting activity in

Q2 has meant that at the mid-year pointthe total amount of transacted powerhas surpassed the highest recorded halfyear total. Take-up in the secondquarter amounted to 10.8MW, on parwith the five-year average for thisperiod. However the year-to-date totalhas now reached 38MW, a historic highfor the H1 period and a total whichserves to substantiate the noticeableimprovement in customer demand forthis year.

Continuing to drive demand across themajor markets in Europe is connectivity-led requirements from content, telecomsand cloud providers. Cloud providers inparticular have been especially active,securing data centre capacity aimed atservicing expectant growth in demandfrom end-user groups. Interxion notedin their Q2 earnings presentation thatcloud platform providers currently makeup approximately 25% of their business.This provides an example of the growing

relationship between cloud andcolocation businesses.

COLOCATION MARKET HIGHLIGHTS

Given the importance placed onconnectivity it is of little coincidencethat the markets of Amsterdam and

Frankfurt are experiencing the strongestlevels of demand. Frankfurt currentlyhas recorded the highest amount oftake-up of any of the major markets. Atotal of 13.2MW has been transactedso far this year which is just short of the14.7MW of contracts awarded in2013. In Amsterdam take-up nowexceeds that achieved in the full year of2013. At the halfway point 11.7MWhas been sold, the highest total onrecord for an H1 period.

Take-up in Europe's largest market,London, currently lags behind both

Amsterdam and Frankfurt. A total of8.6MW has been transacted so far thisyear, which compares to the 8.3MW inH1 2013. However, a considerableamount of latent demand has built upin London which is currently generatinga rise in the number of newrequirements coming to market in2014. It is our opinion that the latterhalf of this year will see many of thesecomplete resulting in improvement to

take-up.

Although commented upon in relationto the London market in thispublication, the topic of churn is likely

to have influence on new business forall operators moving forward.Customer retention levels remainexceptionally high for data centreoperators due to the extremecomplexity, cost and risk associatedwith moving IT infrastructure.

However, upcoming lease events insome cases will involve a customerdesire to reduce their IT footprint andbenefit from the gap between renewalrates and current market rates. In

instances of where location flexibility ispresent, this may encourage somecustomer movement which in ouropinion presents an additional sourceof opportunity for operators to win newcustom.

TAKE-UP & DEMAND

Charts 4 & 5: Historic Take-up Analysis

Take-up by Market Sector (MW) Take-up by Location(MW)

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TAKE-UP & DEMANDMARKET NEWS ROUNDUP

The second quarter of 2014 has seen levels of take-up oftechnical real estate remain buoyant, continuing theconfidence that was evidenced during the first three months

of the year. The improving economic landscape acrossEurope continues to benefit the industry as companies planfor growth and execute IT strategies.

Increasingly the use of third parties continues to play a leadrole in the take-up of data centre infrastructure ascorporates embrace IT integration and outsourcingsolutions. It is unsurprising therefore that these types ofoccupiers and operators of technical facilities were involvedin much of the most notable take-up of data centre spaceover the quarter.

For example, BThas announced the expansion of its datacentre capacity in France, taking space in the new recentlyopened Equinixfacility in Paris, whilst Indiantelecommunication services provider, Tata Communications,expanded its global data centre footprint through a strategicpartnership with Interxionin Germany and Austria, andZenium Technology Partners confirmed that Turkey's largestsystems integrator has entered into a lease agreement tosecure space around 480 sq m in Istanbul One Zenium'sdata centre in Istanbul.

Much of the rise in activity amongst IT integrators andhosting providers is driven by the need to supply European

and global enterprises with IT services and support.The past three months has seen a number of notableexamples of these types of transactions. For example, IBMtogether with Fiat,Chrysler Group and CNH Industrial hasannounced a multi-year strategic services agreement tomanage the IT infrastructure and services that support day-to-day operations and locations on a global basis. Otherexamples saw BTwin a contract with De Beers Group toorchestrate a wide range of IT services across 70 sites,including exploration and mining locations across the world,whilst CGI announced the renewal and expansion of itscontract with energy producer EDPto provide data centre

and infrastructure management services and DNBsigned anagreement with HCL Technologies that will see HCLmanagethe IT infrastructure services and application operations forall DNBbusinesses across Norway and its key internationallocations.

Retail colocation providers also enjoyed a busy quarter withtheir readily available product proving an attractiveproposition to many. For example, Interxionreported that itwill provide Minds + Machines with data centre services inDublin, whilst also securing Dutch ICT solution providerCtacas a client in its Amsterdam facility. Also in Holland,EvoSwitchannounced that Detronhad chosen it for the

expansion of its data centre footprint, and The City ofAmsterdamchose KPNto provide colocation services for itsinfrastructure in its Almere facility.

In the UK, Naglotechchose City Lifeline's London datacentre to operate its managed IT operations whilst C4Lannounced the signing of a three-year deal with Pulsantand

City University London expanded its presence at CustodianData Centres' facility in Maidstone. In addition, NextGeneration Data Centres continued to add to its facility aftersecuring AirVMand Azlaas clients.

Of course, large enterprises are also been willing to takespace directly themselves or through retaining control of thesystems that sit on the IT platform. For example, in Ireland,Dublin County Council granted planning permission for asecond data centre for Googlelocated adjacent to thecompany's existing facility in the city which will include theconstruction of a 30,361 sq m facility, whilst German

software firm, SAPreported that it will invest in two datacentres in Russia in a bid to expand its cloud service offeringin the country.

In Norway, Green Mountain completed building a Tier IIIdata centre in Rjukain which it let to the Norwegian bankinggroup,DNB and in Belgium, ICTroomhas announced it haswon a contract to supply a 2 MW data centre for a Belgiangovernment department.


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TAKE-UP & DEMANDINVESTMENT AND OUTLOOK

Investment

One of the characteristics of the data centre market during

the second quarter of 2014 is the amount of merger andacquisition activity, reflecting the on-going consolidation ofmarket and the desire for investors to inorganically increaseexposure. Notable deals in Europe during the period sawFrench IT providers agree a deal which will see Stora buySteriafor a price estimated at 730 million, whilst also inFrance, French integrators Atosannounced that it will payaround 620 million to acquire Bull.

On a global basis, Level 3acquired tw telecom for areported US$5.7 billion whilst the US fibre network companyZayo Group bought French provider, Neo Telecoms and UK

based Geo Networks Ltd during the quarter. Other notabletransactions saw UK based provider of managed servicesand colocation company Pulsantbought from BridgepointDevelopment Capital by private equity firm Oak Hill CapitalPartners. Terms of the transaction were not disclosed butmedia reports suggest the deal could be in the region of200 million. In addition, Manchester-based infrastructureprovider M247 acquired Web.Solutions Direct for anundisclosed seven-figure sum.

Elsewhere in Europe, Claranet acquired the Dutch cloudservices provider NovaDatafor a reported 7 million whilstalso in Holland IS Group announced the acquisition of

cloud hosting provider WideXS. The Channel Islands basedcommunications provider Sure, reported that it will acquireForeshore, a Jersey based data centre and cloud servicesprovider whilst Capitahas acquired IT network servicesprovider Updata Infrastructure UK) Limited for a cashconsideration of 80 million.

In addition, the quarter also saw a number of significantexamples of companies raising finance to help fundexpansion programmes. In the UK, DataCentredannounced that it secured combined funding from theGreater Manchester Investment Fund, venture capitalist Jon

Moulton, Perscitus Advisers, and The North West Fund forVenture Capital. Also Liverpool based data centre provider,Aimes secured funding from Santanderand Skyscape CloudServices Limitedsecured a 4 million minority stakeinvestment from Business Growth Fund to accelerate itsgrowth in the UK public sector market.

This type of activity was not limited to the UK. In Russia,Moscow data centre operator, iXcellerate increasedinvestment from an existing investor, Sumitomo, and DigiPlexbecame the first to launch a bond transaction to finance theconstruction phase as well as providing long-term financingfor its newest data centre located just outside Oslo, Norway.

The inaugural five-year bond transaction was successful inraising approximately 50 million.

Forecast

As prospects in the economies of Europe continue to

improve, albeit against a background of escalating MiddleEast conflict and a destabilised Ukraine, the data centremarket should continue to grow. Recent research fromGartnersuggests that global IT spending will rise by over 2%to US$3.7 trillion in 2014. They do note, however, thatdata centre system spending will be the slowest growingcategory in 2014, rising only 0.4% to US$140 billion due tofactors such as lower-cost storage options in the cloud and amove away from high-end server systems.

Growth in spending on cloud services and products is set tobe an important component of this as enterprises move their

information technology service applications andinfrastructure to a cloud-based architecture. The publiccloud services market for example, is expected to reachUS$191 billion in revenues by 2020, more than tripling theUS$58 billion in revenue in 2013, according to a recentreport by Forrester Research.

A new survey commissioned by Digital Realtyindicatedfurther positive news for data centre capacity growth forEuropean companies. In the research undertaken byForrestermore than 90% of respondents indicated they areplanning some form of expansion within the next four years.More than one-third (38%) of respondents expected their

existing data centre budget to grow between 5-10% in thenext 12 months, with an additional 7% of respondentsexpecting to increase their data centre budget by more than10% in the next 12 months.


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However most of the completedtransactions in London this year havefallen below the 500kW mark and this

has resulted in the lower amount oftake-up.

One specific topic that may havesignificant influence on take-up levelsmoving forward is that of customerchurn. Telecity highlighted in theirrecent results a rise in recorded churnrates in part attributed to the closure ofProspect House but also because ofunderutilisation of space from somecustomers. The latter, in our opinion,could become more prevalent moving

forward as London's enterprisecustomers with excess space look todownsize their footprint.

Those customers with an imminentlease event will also seek to benefitfrom the competitive pricingenvironment where the delta betweenprices paid on an maturing indexed

The level of take-up in London remainsbehind that of its closest Europeanneighbours at the mid-year point of

2014 despite a noticeable rise in newenquiries. Total transactions for theyear amount to 8.6MW, on par withthe equivalent period in 2013,although a little disappointing giventhe renewed interest evident this year.

It is the improving economicenvironment which is encouragingcorporate end users in particular toconsider their future IT needs. Recentresults from the IMF suggesting that theUK economy is currently growing faster

than any other of the G7 states.

Against this backdrop a restoration incorporate confidence is gathering paceand this is fuelling an upturn in datacentre requirements both from endusers themselves and also frompotential partnering organisations suchas cloud service providers.

LONDON

contract and new business contractpricing has grown in the past 12-18months. These two factors combined

may encourage some customers whohave locational flexibility to consider amove in order to obtain the bestpossible solution at the lowest price.

Should customer churn rates begin torise this will impact the supply of newspace. As at Q2 2014, total supplystood at 326MW with 75MW currentlyavailable. The result of customerdownsizing and relocation could be aslower rate of new supply as operatorslook to refill vacated space before

investing further in new inventory.

MARKET FOCUS

FRANKFURT

Demand for data centre space inFrankfurt has exceeded that of theother major markets this year with thetotal of new customer contracts close tothat secured in all of 2013. Take-upfor the first half of 2014 amounted to13.2MW just short of last year's total of14.7MW but well ahead of the 5.6MWcontracted in H1 2013.

The strength in the data centre markethas come at a time when the Germaneconomy is beginning to falter. Thefederal statistics office in Germanyrecently reported an economiccontraction of minus 0.2% in thesecond quarter. The result of this infuture could be to derail potential newrequirements from some prospectivecustomers, particularly enterprisesalthough there is little sign of this atpresent.

Furthermore, any impact of enterprisebusiness confidence loss is likely to beminimal to demand at least for theshorter term.

Similar to Amsterdam, the majority ofnew contracts and requirements can beattributed to global technologycompanies, content providers andcloud infrastructure companies. Morethan 50% of identified take-up this yearhas derived from customers who fallunder one of these segments with newcapacity being secured toaccommodate new product

development and the expectantincrease in enterprise demand forcloud services in particular.

The heightened demand this year hasmeant that availability of customer-ready space has been reducing. At theclose of the second quarterapproximately 22MW of customerpower was available although not allof that capacity has space fitted out.

For some operators strong customerinterest has brought about a revision toexpansion plans.

Interxion announced in April of theirintention to accelerate the constructionof FRA8 which will add 6MW customerpower when completed in 2015.Similarly e-Shelter continues to makeprogress with construction of theirsecond building at the Russelsheimcampus. Completion of this phase isexpected in early 2015.


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At present though the slower rate ofoverall demand has meant that therehas been little movement in supply thisyear. Total supply amounts to 120MWwith 18MW currently available

although when considered inconjunction with power assigned tounbuilt phases of data centresavailability is much higher. Thisimbalance in supply and demand hasled to pricing in the Paris marketbecoming particularly competitive inrecent months.

serving to discourage most end userorganisations from committing to allbut essential spending activity.

Comparison can be drawn with London

in that in anticipation of an upsurge incorporate outsourcing cloud providersare beginning to take additional space.During Q2 Interoute became the latestexample of service provider expansionadding 400 sq m to their Paris datacentre. With Paris retaining one ofEurope's highest concentrations ofglobal enterprise occupiers it is ouropinion that cloud service providers willincreasingly factor in future demand.

Data centre letting activity remainsrelatively subdued in Paris with thedominant enterprise sector remainingoverly cautious when consideringlonger term spending commitments.

Take-up for the first half of this yearstands at 4MW, slightly less than the4.4MW achieved in the same period of2013, and the lowest of the majormarkets.

Business confidence and thereforegrowth in demand continues to beundermined by a weak nationaleconomy. The latest figures fromINSEE indicate a second successivequarterly GDP growth rate of zero

percent in 2014. This is currently

PARISMARKET FOCUS

AMSTERDAM

In Amsterdam the amount of powerreserved in new customer contractsawarded this year has now passed thelevel achieved in all of 2013. At themidpoint of 2014 total transactionsamounted to 11.7MW; this comparesto the 11.3MW sold in total last year.

Connectivity-driven demand continuesto dominate the European data centrelandscape seeing cloud, telecom andcontent providers particularly active.This type of customer is drawn tonetwork-rich Amsterdam with access tothe AMS-IX network having significantimportance to growth and delivery ofservices.

Typically the larger contracts tenderedin Amsterdam derived from one ofthese sectors with the contribution totake-up in the last 18 months close to50%.

Strong demand continues to provoke apositive response from colocation

operators with regard to newinvestment. During the second quarterTelecity announced that the final 5MWof capacity has been opened at their

AMS 5 facility. This followed theannouncement from Interxion in Aprilto speed up the delivery of newcapacity at their AMS7 data centre witha decision also made to increase

The consequence of this is thatenterprises remain reluctant to committo undertakings which involvesignificant change and investment suchas data centre outsourcing, and areelecting to hold firm current positions.The scale of data centre capacitytransacted in H1 2014 reflects theenterprise apathy. A total of 490kWhad been contracted by the mid-pointof the year. This total is 40% less thanin the equivalent period of 2013although is only slightly short of thelonger term average of 520kW for theperiod.

MADRID

A steady improvement to the Spanisheconomy in H1 2014 has begun toform a foundation for data centredemand growth in Madrid but as yethas not proved to be the catalyst.

According to the National StatisticsInstitute, the country's GDP grew by0.4% in the first quarter, the highestrate in six years, followed by 0.6% inQ2, making Spain one of the strongestperformers in the Eurozone.Despite these positive indicatorsbusiness confidence has remainedfragile. The latest index results fromthe Ministry of Trade in Spain show thisto be in negative territory currently (-6).

Looking ahead latent enterprisedemand can be expected to begin tofilter through to the colocation marketshould economic stability bemaintained. Current enterprise ITstrategy is positioned towardengagement with an outsourcedpartner, increasingly involving cloud.This should benefit colocationproviders moving forward both throughan upturn in direct demand fromenterprises and through growth inbusiness from cloud service providers.

the amount of available customerpower to 15MW.

Total supply at the end of Q2 had risento 134MW of customer power with25MW currently available. The supplytotal represents an annual growth rateover the past five years of 21% pa,

close to double that of any of majorEuropean market. Both Equinix andInterxion are scheduled to bring furthercapacity on before the year closes.Interxion will complete the next phaseof AMS 7 in Q3 2014 and the secondphase of Equinix AMS3 is due forcompletion in Q4 adding capacity for1,800 cabinets.


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DEFINITIONSCOLOCATION

TIER 1 MARKETSAmsterdam, Frankfurt, London, Madrid, Paris

SUPPLY Retail colocation supply comprises of fitted data centre space only; unbuilt shell phases of the data centre are excluded.

Wholesale colocation supply includes both fitted and shell data centre space. Typically wholesale operators sell shellspace which is built out to suit customers.

AVAILABILITY Retail availability of space is based on fully fitted space vacant and available to sell

Wholesale availability is based on all vacant space.

VACANCY RATE

The vacancy rate is a product of availability/total supply.

COLOCATION TAKE-UPThis comprises data centre space committed to at retail and wholesale colocation facilities in the relevant quarter.

TOTAL MARKET TAKE-UPThis comprises of colocation take-up (retail and wholesale), significant secured data centre space classified as Self-build orThreat stock (either surplus carrier or corporate facilities).

Self-build: typically land for development or modern empty warehouse which is acquired for conversion to a data centrefor use by an end-user which will use the space for their own purposes e.g. a large bank.

Threat stock: surplus carrier/webhosting space offered to the market as competing stock on a carrier neutral basis

SPACE TYPEShell: shell & core space is the base real estate of a data centre, a wind and watertight structure with exposed floor andceiling slabs and exposed finishes to the walls. The landlord would obtain permissions for data-centre use and makeprovisions for tenants to install their own chillers and back-up power generating equipment. In addition, an incomingdiverse raw HV (high voltage) power supply would usually be provided.

Fitted: fully-fitted space is ready for tenant IT equipment to be installed almost immediately or subject only to minor worksbeing carried out to account for bespoke equipment and layouts.


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CONTACTS

Andrew Jay

Head of Data Centre SolutionsGlobal Corporate Services

CBRE10 Paternoster RowLondonEC4M 7HPt: +44 (0)20 7182 3461e: [email protected]

Martin Carroll

Senior DirectorGlobal Corporate Services

CBRE10 Paternoster RowLondonEC4M 7HPt: + 44 (0)20 7182 3529e: [email protected]

Darren Mansfield

AnalystGlobal Corporate Services

CBRE10 Paternoster RowLondonEC4M 7HPt: + 44 (0)20 7182 3019e: [email protected]

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Disclaimer

CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believedto be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty orrepresentation about them. It is your responsibility to confirm independently their accuracy and completeness. Thisinformation is presented exclusively for use by CBRE clients and professionals and all rights to the material are reservedand cannot be reproduced without prior written permission of CBRE.

DATA SOURCECBRE in association with Jonathan Heap, Director, iXNewsSearch

iXNewsSearch is the leading daily news research service developed for organisations with a strategic interest in the datacentre and mission critical facility industries. Groundbreaking at its inception in 2001, the interactive e-mailed documentis packed with global news providing invaluable and timely insights into the business of data centres.

CBRE DATA CENTRE SOLUTIONS

CBRE formed a Data Centre team in 1994 to address the specialised technical real estate needs of high-tech firms suchas telecommunications companies, data centre operators and corporates.

Core technical real estate services provided by the CBRE Data Centre Solutions team include: Investment Disposal one-off assignments, multi-site marketing campaigns Acquisition one-off assignments, worldwide network rollouts Consultancy consolidation strategies, Mergers & Acquisitions Asset Valuation Bank, Corporate Project Management, Development Monitoring, Due Diligence, Building and M&E surveys Research market reports, statistics, take-up forecasting

CBRE has monitored worldwide Colocation supply statistics since 1999. This bulletin relates only to the EuropeanColocation Tier 1 markets. Additional market statistics are available on request.

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