I always enjoy CBRE’s detailed Data Centre Marketview, the Q4 2014 edition of which just released and I’d thoroughly recommend it to anyone interested in the European data centre industry (link at the bottom of this article).

I do though wonder why they insist on the bullish headlines about demand here and there when actually the bigger story (again) in my humble opinion is supply?!  To quote: “(current) availability at 153MW is the highest on our records”.  Frankly this statistic doesn’t surprise me at all (and hopefully no one else who follows the Colo-X industry musings).

In fact the bulletin goes on to say that availability could increase further in 2015 (ie even more supply!) with the agent predicting a further 101MW scheduled for delivery in 2015.  Interestingly enough more than half of this figure is forecast to open in London (think of Infinity Stratford, Telehouse North 2 and Equinix LD6 for example).  101MW by the way compares with “take up” of some 66MW in 2014 across the whole of Europe, so despite availability already being at record levels supply is expected to outpace demand again in 2015!

Telecity/Interxion Merger Supply Impact?

One theme that struck me about the recent news regarding the Telecity/Interxion merger was Telecity’s determination to reinforce financial discipline in the market.  Sadly in light of the comment above about London I don’t think the merger will make much of a difference for the moment unless the combined group shelves plans for Interxion’s phases three and four on their Hanbury Street campus.  Frankly Interxion is a very small player overall in London (we estimate around 70,000 sq ft of net tech compared to a market of nearly 2m sq feet) and in fact I doubt the two groups really ever competed head to head that much in London.

Interxion London Phase Three I think is actually underway, with contractors on site, so probably too late to stop that one but the new build phase four may be of less interest to the larger unified entity, especially with the huge potential still left at Telecity Powergate and Harbour Exchange.  Therefore perhaps its on the continent where we may see more of an impact from the merger on the supply picture, but as our good friends at CBRE point out, the supply pipeline still remains strong, indicating the market is likely to remain highly competitive despite the new approach from the enlarged group.  Indeed as many financial market commentators have mentioned, both companies are now effectively “in play” at least until a binding agreement is signed in the middle of next week, so we cant take anything for granted just yet.

One interesting side note to the Telecity/Interxion deal was I recall reading at some stage in 2014 the appointment of former Telecity UK MD Adriaan Oesthoek to become Interxion’s UK MD.  I wonder if he’ll get his old job back?!

It’s a good time to be a colocation buyer!

Overall though the conclusion remains (and despite the Telecity/Interxion merger) – it’s a good market for buyers and sellers have to compete hard to win business.

To discuss any upcoming data centre or colocation project, no matter how small, please don’t hesitate to contact Colo-X – a quick call is usually all it takes to understand your situation, review the options and make some recommendations.  We also keep a list of colocation deals and offers update on Colo-X: http://bit.ly/MXyuy4

Link to CBRE Q4 2014 Data Centre Marketview: http://bit.ly/18g0ACy