Posted By Rich Miller On May 31, 2011 @ 8:17 am In Europe | No Comments
Demand for carrier-neutral data center space in top European markets remains “tentative,” but a gradual recovery is leading to absorption of available supply, setting the stage for new construction in key markets, according to the latest quarterly market analysis (PDF)  by real estate firm CBRE.
“When compared to the same period in previous years, total market take-up remains very much close to the long term average,” CBRE writes. “As such, whilst we feel sentiment in the market has shown improvement from last year, a degree of caution still remains, particularly surrounding the fragility of growth prospects for the respective European economies.”
As in the U.S., the economic setbacks in late 2008 slowed spending and prompted many companies to evaluate their capitals spending. Ensuing economic crises within the EU also had an impact on spending.
If the economic slowdown has affected demand, it has had a larger impact on supply, with fewer new projects being started. As a result, vacancy of fully fitted-out wholesale and retail colocation space has declined to 7.4 percent in Tier 1 markets (London, Amsterdam, Paris, Frankfurt and Madrid), an all-time low.
Availability of ready-to-use space is particularly tight in London. “The availability of fully-fitted space has now become particularly tight dipping to under 5% at quarter end,” CBRE says in its assessment of the London market. “A number of new schemes are expected going forward although the majority of these will arrive in 2012.”
Amsterdam has seen the strongest demand for space in major European markets, as the first quarter of 2011 saw strong colocation demand and a large deal for wholesale data center space.
CBRE’s findings on the European recovery are reinforced by data from a survey from Digital Realty Trust of decision-makers at 205 major UK and European organizations. Eighty-two percent of organizations polled reported that they would either ‘definitely’ or ‘probably’ expand their data centre facilities in 2011, with half planning to expand in two or more locations.
“Overall, the survey indicates that the European data centre market is about to enter a cycle of robust growth,” said Adam Levine, VP Europe at Digital Realty Trust.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2011/05/31/cbre-tentative-recovery-for-european-market/
URLs in this post:
 quarterly market analysis (PDF): http://www.cbre.co.uk/uk_en/services/global_corporate_services/data_centres_networks/research/research_content/research_left/2011%20Q1%20European%20Data%20Centre%20ViewPoint.pdf
 Digital Realty survey results: http://investor.digitalrealtytrust.com/phoenix.zhtml?c=182279&p=irol-newsArticle&ID=1567501&highlight=
 Rich Miller: http://www.datacenterknowledge.com/archives/author/richm/
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