Over the course of 2020 data centres were recognised for their crucial presence in maintaining communication and knowledge during the unexpected COVID-19 pandemic. The subsequent rise in requirements has accelerated and deepened demand for data centre capacity across the world.
As construction of new product reaches 2.9 GW (up from 1.6 GW in 2019 and mostly spoken for), Cushman & Wakefield has released a Data Center Global Market Comparison highlighting which markets are demonstrating the factors data centre investors, owners, operators and occupiers value, and which markets are rising through the ranks. Europe has two markets in the overall top 10 – London and Amsterdam – and four – Athens, Stockholm, Moscow and Vienna – in the list of 10 markets to watch.
While demand of data centres has been increasing for a number of years, the COVID-19 pandemic and the resulting reliance upon cloud services has catapulted data centre demand amongst occupiers and investors alike to new levels and has resulted in a highly competitive marketplace, particularly in established markets. With the shift to cloud services likely to continue and further optimise, increasing land values, limited power availability, data centre construction moratoriums and fibre connection latency demands in some established markets is also unlocking activity in emerging locations.
Large markets throughout Europe tightened considerably in 2020, with greater capacity and sustainability pulling at opposite directions. As these problems resolve through continued planning between industry and local planners, we can expect demand to remain robust.
Topping Cushman & Wakefield’s overall global data centre index is Northern Virginia. A combination of large market size, robust fibre, attractive incentives, low cost power, and the largest development pipeline places the current global leader in an excellent place for the future. Chicago follows in second place, mirroring many of Northern Virginia’s attractions. Sydney rounds out the podium and features as the biggest mover in the overall rankings, capping off a year of major new development announcements and an ongoing transformation of much of Australia’s government IT infrastructure.
Cushman & Wakefield’s Top 10 Global Markets for Data Centres
1. Northern Virginia
4. Silicon Valley
9. New York / New Jersey
Secondary markets continued their growth throughout 2020, with many new ventures forming to build out critical infrastructure in emerging markets. Funded by an amalgamation of pension funds, private equity, and sovereign wealth, the capital invested in these companies will enable powerful platforms in markets that had been ignored for lack of volume in previous years. The battle for market share across these markets will define the industry over the next several years.
Kevin Imboden, Director of Research, Data Center Advisory Group at Cushman & Wakefield, said: “Secondary markets continue to grow in importance, with some areas in Europe and Asia of particular interest as providers move to bring capacity to closer to users. These secondary locales often provide greater margins for data centre operators, with some set to grow to primary market status in the future.”
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