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London on track to become ‘Gigawatt’ colocation hub by 2023 – report

Written by Wed 14 Oct 2020

Covid-19 demand drives record market activity across Europe, though coronavirus has impacted construction, operations and power resilience, report claims

London is set to become one of four European regions with live colocation power of over 1,000 MW by 2023 thanks to a surge in cloud and internet service demand, a new report has claimed.

Report authors Knight Frank, a global property consultancy, and data centre market analysts DC Byte, said local and national lockdowns spurred an unprecedented upturn in demand for digital services across Europe, cementing London as a top-four colocation hub alongside Frankfurt, Amsterdam and Dublin.

With demand expected to continue post-pandemic, the report claimed all four regions will become “Gigawatt” colocation hubs by 2023, with total supply of IT power exceeding 1,000 Megawatts.

Data centre sector in 2020

Despite Covid-19’s huge strain on the global economy in 2020, £23.5bn was invested in the European data centre sector in the first half of the year compared to last year’s £1.53bn investment volumes. In addition, 282 MW of IT power was purchased in H1 2020, a 50 percent rise compared to the same period in 2019.

The report claimed the additional data centre capacity was led by public cloud providers catering to firms migrating on-premise storage to the public cloud, with the majority of deployments in wholescale colocation premises. Nevertheless, Knight Frank said the rise in cloud adoption has blurred the lines between retail and wholesale colocation, noting that very little separates the leading global operators in terms of design, operation and pricing.

While Frankfurt, London, Amsterdam and Europe have managed to meet swelling demand, few facilities are now holding surplus capacity, leading operators to consider alternative forms of design and utility procurement and utilisation.

And in order to satisfy ongoing appetite for IT power, Knight Frank anticipates growth in second and third-tier markets as customers consider alternative locations. Madrid, Copenhagen and Warsaw have emerged as the fastest-growing European markets with over 700MW of enterprise hyperscale and build-to-suit developments in planning or active development. Developments are also expanding outside of traditional hubs in countries such as Spain, Poland and Madrid.

While Covid-19 hasn’t presented capacity challenges the virus has interrupted supply chains and led to staffing shortages that have complicated operations and increased downtime, with a UPS failure at Equinix’s London LD8 facility the most high-profile case.

Quality and durability of power supply are also under threat as Europe’s electrical infrastructure struggles to keep pace with larger power applications due to rapid migration to direct grid connections, the report notes.

Construction too has been moderately impacted, with Digital Realty and Equinix delaying or extended expansion plans and Facebook delaying construction at a Dublin data centre for several days after a number of employees tested positive for coronavirus.

“Our research identifies the rise of the European Gigawatt markets with London and Frankfurt leading the charge as well as identifying key opportunity markets including Madrid, Copenhagen and Warsaw,” commented Stephen Beard, Partner and Head of EMEA and APAC Data Centres at Knight Frank.

“There are often a lot of assumptions made in the market, typically based on how countries have delivered in the data centre sector in the past. A number of these new findings will challenge that thinking. We predict that the sector will only continue to grow in importance, particularly given the increased remote working and digitisation of companies as a result of the COVID-19 pandemic.”

Written by Wed 14 Oct 2020


colocation market
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