Cloud increases its dominance of European colocation

- 81% of Q1 take-up came from cloud

- The four largest markets are forecast to grow by 21% in 2019

In the past 12 months, the hyperscale cloud companies alone have procured over 100MW of colocation capacity in the four FLAP markets of Frankfurt, London, Amsterdam and Paris. This equates to a capital investment of $800 million, according to new research from CBRE, the world's leading real estate advisor.

CBRE analysis shows that the four FLAP markets set a new high for Q1 take-up, recording 41MW. Frankfurt particularly shone, representing nearly 50% of the total. Paris had a second consecutive quarter of over 10MW of take-up, the first time it has ever managed that feat.

Conversely London had a quiet Q1, because of its reliance on the cloud providers who deployed their requirements in the other markets during the quarter.

CBRE forecasts 223MW of additional supply to be brought online to the year-end. This is a staggering 21% annual growth and is indicative of European and US developer-operators aggressively seeking to grow their footprint in order to give themselves the best chance of winning the limited number of increasingly large cloud transactions.

M&A and investment again looks set to be a key story this year, as highlighted by two recent These are Switch Datacenters selling its AMS1 facility to Equinix and KPN announcing the sale of its Dutch data centre business, NLDC.

The major themes driving the European data centre sector, larger customer requirements, bigger data centre developments and heightened levels of M&A, all continue to be driven off the back of what the cloud providers are doing. These companies, responsible for 81% of demand in Q1 2019, are tightening their grip on the European colocation sector, shaping entire markets as they go about their business. Companies right across the supply chain are redefining whole business models to serve this one client-base.
Mitul Patel, Head of EMEA Data Centre Research at CBRE