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No need to FLAP


Well, there certainly isn’t for the European data centre market, as the FLAP market prepares for record take-up and supply growth, surpassing 2,000MW.

Of course, the FLAP (Frankfurt, London, Amsterdam and Paris) crew will be getting the attention it’s used to, expecting to see more than 415MW of new supply added this year. And to put this into some sort of context, that’s more than 100MW more than the last highest performing year – which happened to be 2019.

Over the next three years, the hyperscale cloud crowd will continue to be the main consumers of data centre supply, accounting for a large proportion of wholesale colo deals.

Enterprises and other service providers will encourage growth across the retail colocation market too, as they look to transform IT environments post pandemic.

According to the quarterly Europe Data Centres report from global real estate advisor CBRE, 370MW of take-up is also expected, more than 230MW of which has already been signed as pre-lets. The market signed 440MW of new contracts in 2020 – more than half of which will be realised in future years.

With this unprecedented growth, the FLAP market will without doubt surpass 2,200MW of supply. And these high rates of growth are expected to continue well into 2022 and 2023, with CBRE forecasts showing cloud currently accounting for a massive 80% of market demand.

Penny Madsen-Jones, director of EMEA Data Centre Research at CBRE, said such high activity follows 2020, when the market surpassed its original forecast made in Q1, 2020 (prior to Covid-19) to record more than 200MW of new take-up.

“It is remarkable that the data centre market, which has faced supply challenges, has been able to meet continued high demand.

“Constraints have ultimately led more customers – in particular hyperscale customers – to carefully consider their data centre needs for the years ahead, and this has led to high pre-let activity. This provides CBRE with amazing insight into take-up for the years ahead.

“Much of the pre-let activity we have seen has been focused around existing cloud availability zones. We will see even more such activity as the build-to-suit market (which builds specifically to hyperscale specifications) grows. 

“Many markets, however, will continue to experience challenges to site access and power in where cloud availability zones exist, and we expect, as a result, to see new availability zones formed across existing markets in coming years, leading to continued high demand.” 

During 2020, 173MW of supply was added across the FLAP markets, which saw 201MW of take-up. The markets currently operate with a vacancy rate of 19%, down from 21% a year ago.

Suppose when you’re flapping, the only way is up, right?

This editorial originally appeared in the Data Centre Review Newsletter March 19, 2021. To ensure you receive these editorials direct to your inbox, you can subscribe to our weekly newsletter here.

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