With the financial concerns in Europe, you'd expect businesses might be postponing decisions about major investments. Instead, data center leasing in Europe improved in the first quarter of 2012, especially in the London market, according to new data from CBRE.
While enterprise users remain cautious about the lingering uncertainty from Eurozone problems, some delayed requirements can no longer be put off, CBRE said.
"Our discussions with operators have revealed that the scale of new enquiries are increasing," CBRE's Andrew Jay and Darren Mansfield write in the firm's quarterly review of the European data center market . "This provides evidence to our view that delayed critical IT investment decisions can no longer wait for signs of economic recovery and as such, we are seeing the early signs of pent-up demand being released."
Demand was particularly strong in London, where providers of data center space reported wholesale providers reported contracts for 7,980 square meters (86,000 square feet) or about 12 megawatts of IT power, in the first quarter of 2012. That's twice as much space as was leased in all of 2011, according to CBRE.
The strength in London contributed to total transactions across Europe of 16,005 square meters (172,000 square feet) or about 21 megawatts of power. All Tier 1 markets in Europe "received a steady amount of new activity" the report said.
The European market is also seeing more data center supply come onto the market after a quite period following the start of the economic crisis in 2008-09. The new supply arrives as major markets are beginning to see strong absorption of available space.
"The decline in availability has been most notable in Amsterdam, where exceptional take-up over the past 12 to 18 months has resulted in a sharp fall in available supply," CBRE reported. "The current level of vacancy is now 9.1%, having fallen from over 17% in Quarter 3 2010. This equates to around 10MW of IT power on sale at present, the lowest of the major Tier 1 markets."
See the full report for additional details.