European Data Centres MarketView

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1 European Data Centres MarketView Q4 213 CBRE Global Corporate Services SUPPLY +5.% y-o-y Dec 13 AVAILABILITY -7.4% y-o-y Dec 13 VACANCY RATE -1.8% y-o-y Dec 13 COLOCATION TAKE-UP -5.2% y-o-y Dec 13 LONDON & FRANKFURT UNDERPIN DATA CENTRE DEMAND 1 Quick stats AS AT QUARTER Supply Availability Headlines Colocation take-up in Frankfurt highest for 4 years London colocation take-up records 26% annual rise Retail leasing activity in London double that of 212 European rate of vacant supply lowest for 2 years Vacant space in Frankfurt dips to historic low In this issue Executive Summary Supply & Availability Take-up & Demand Market Focus London Frankfurt Paris Amsterdam Madrid Key Statistics Definitions 68,926 sq m 9,334 sq m Vacancy rate 13.27% Colocation take-up quarterly Colocation take-up annual YTD 19,461 sq m 42,652 sq m EXECUTIVE SUMMARY 213 marks a pivotal year for data centre demand in the European colocation market. The macro economic situation looks healthier both within the Eurozone and the UK, with the early signs of returning business confidence beginning to translate into an increase in new business for data centre operators. Total colocation take-up for the year recorded a small decrease in comparison to 212 at 42,652 sq m. The first half of 213 was particularly slow in terms of transactions completed with the second half of the year accounting for 65% of annual take-up. Major corporate hubs such as London and Frankfurt notably have experienced sharp increases in the level of completed transactions in 213. Total colocation take-up in Frankfurt was the highest recorded for 4 years with an annual increase of 2%. Following a weak 212, demand for London retail returned in 213 with take-up in this sector double that of the previous year. Several large wholesale transactions also completed in London and these combined with the improved retail total amounted to a 26% year-on-year increase in colocation take-up for the UK capital. Throughout the year demand remained dominated by cloud-driven requirements as providers secured space to satisfy growth of existing contracts and the strengthening potential for new custom. An improving economic picture has additionally meant that corporate end users have begun to focus their attention on future growth with IT underpinning strategy. The deployment of hybrid solutions is now commonplace amongst end users with data centre operators benefitting from direct end user acquisition of new space and expansion of partner companies such as cloud service providers. As expected the slowdown in new build activity in 213 has resulted in vacancy levels falling across the major markets during the year. New supply added in 213 totalled 32,323 sq m, approximately half the amount delivered in 212. The overall vacancy rate across the European markets at year end stood at 13.27%, the lowest level for 2 years. Of the major markets, Frankfurt retained the lowest level of vacancy at 9.95%, a historic low for the city. EUROPEAN TIER 1 COLOCATION MARKET AS AT Q , 7, 6, 5, 4, 3, 2, 1, 8, 7, 6, 5, 4, 3, 2, 1, Supply (Sq M) LHS Take-up (Sq M) RHS

2 Q4 213 European Data Centres MarketView SUPPLY & AVAILABILITY COLOCATION MARKET HIGHLIGHTS A gradual decrease in the level of available supply has been the result of the expected slowdown in new build activity in 213, with the aggregated vacancy rate for Europe major markets falling from 15.4% to 13.27% during the year. For the most part the record increase in new capacity brought on in 212 has been sufficient to satisfy market demand and maintain a sensible market balance. For markets such as Frankfurt however, an unexpected upturn in new demand has meant that pipeline supply has been brought forward to accommodate this increase. Interxion s announcement in Quarter 3 is an example of this with their intention to open a ninth data centre in the city aligning with the opening of the first phase of FRA8. At year end the level of vacant space in Frankfurt had fallen to 9.95%, a historic low for the city. Operators in recent years have become accustomed to deploying new space at the optimum time in order to conserve critical capital funds. Other examples of new build programs in the city are expected to follow into 214. Across the other major markets supply is not as tight although a falling vacancy rate in 213 is consistent theme. London has maintained the highest level of vacancy at 16.65%, largely due to the presence of a significant wholesale offering in the city. Competition amongst operators continues to intensify where the division between wholesale and retail business models has become less clear. The most recent announcement by Infinity regarding the opening of the new facility at Slough highlights the changing market. A feature of the new building is prebuilt space ready for immediate customer occupation, traditionally a feature of a retail product. The fastest growing market remains Amsterdam where supply has doubled in 6 years. Availability in the city however has not risen significantly during this time due to exceptional levels of new demand. The level of vacant space currently stands at 14.67% with significant supply announcements in 213 including the purchase of a site at Hoofddorp by Digital Realty and the opening of EvoSwitch Hall has brought little change to supply and vacancy in both Paris and Madrid. Slower market activity and significant new openings in 212 has meant that the buildout of new space has not been necessary with announcements regarding new supply expected in 214. VACANCY AT HISTORIC LOW IN FRANKFURT Charts 2 & 3: Historic Colocation Supply Colocation Supply and Availability (Sq M) Colocation Supply Annual Increase (Sq M) 8, 7, 2 7, 6, 5, 4, 3, 2, 1, 6, 5, 4, 3, 2, 1, Q4 Supply Availability New Supply

3 3 SUPPLY & AVAILABILITY MARKET NEWS ROUNDUP During the course of 213 we witnessed signs of an improving economic outlook across Europe, and a data centre industry that remained on its positive track, evidenced by some notable transactions throughout the year. In addition, indications of an underlying confidence in the European IT infrastructure market are apparent with stock levels being developed by the wholesale and retail colocation players, and some key mergers and acquisition activity recorded through the year. Unsurprisingly, we have seen the dominant European retail colocation providers continue to expand their portfolios across a variety of centres, increasingly willing to enter more secondary locations, as well as enhancing their presence in the Tier 1 cities. For example, during the year Interxion, reported data centre expansion projects in Stockholm, Vienna, Zurich, Copenhagen, Frankfurt, as well as new facility builds in Stockholm and Frankfurt. In Q4, the company also announced the construction of its seventh data centre in Amsterdam to provide 4,6 sq m of equipped space. Telecitygroup added to its European portfolio during the course of 213, opening a new facility in Finland, and 4MW of newly announced customer power in Amsterdam. Most recently, we have seen a further 5MW of capacity added to its Stockholm facility and the reported acquisition of data centre operators 3DC in Sofia, Bulgaria, and PLIX in Warsaw, Poland, for a combined enterprise value of 15 million. The year also saw Equinix report the opening of the first 1,6 sq m phase of its fifth data centre in Zürich, and reveal plans to expand its portfolio in Slough with an investment of $82 million in the build-out of the first phases of London-6, which will house some 1,385 cabinets. In the final quarter of the year, Equinix acquired the Kleyer 9 facility in Frankfurt from a private investor, which partially houses the company's Campus Kleyer data centre as well as that of Ancotel, the colocation company that it purchased in 212. In the UK, wholesale colocation provider, Infinity SDC, announced the launch of the first phase of its new 9, sq m, 34MVA facility in Slough, whilst ITS-on-NET reported that it has taken over the former HSBC data centre in Bootle, Merseyside and is set to formally launch the 7,43 sq m facility into the market this year. The final three months of 213 also saw UKFast confirm that it planned to build out a data centre footprint in Scotland. Across mainland Europe, announcements of new supply remained buoyant during the final quarter. Works began on Luxconnect's fourth data centre in Luxembourg, due to open in mid-215 and provide around 5,5 sq m of technical space. In Finland, Ficolo reported it was building a new 8,5 sq m facility located in Ulvila, whilst Switch Datacenters announced it would be undertaking a 1, sq m expansion of its facility in Amsterdam. Against a background of an improved underlying confidence amongst corporates in Europe, IT integrators, carriers and hosting companies continued to maintain healthy levels of supply activity during 213, buoyed by the predicted loosening of corporate IT budgets and enhanced cashflow. For instance, during the final quarter of the year we have seen SunGard Availability Services announce a 6,5 sq m data centre expansion in Birmingham, along with a new 1,7 sq m facility in Sweden. In France, Orange reported the opening of a new 5, sq m data centre in Val-de- Reuil, north-west of Paris, whilst T-Systems outlined its new strategy to invest in new data centre facilities in the country to promote its cloud computing services. In addition, in Holland, Hewlett Packard opened a new facility in Roosendaal, south of Rotterdam, using Colt Technology Services' FTEC data centre platform. One of the more significant announcements of the year amongst IT integrators saw Microsoft report the investment of 17 million to expand its existing data centre in Dublin. This latest expansion adds 15,7 sq m of computing capacity and increases the total footprint of the data centre campus to 54,255 sq m. In addition, it was reported that the company has bought a site in Middenmee, Holland, on which it intends to build a 17.5 MW facility. The year has seen some development activity, although as has been the case over the course of the last five years or so, evidence of speculative building continues to be relatively scarce. For example, in Norway, Green Mountain Data Centre reported the start of construction of its facility in Rjukan, its second in the country and planned to open next year. Meanwhile in Dublin, Digital Realty broke ground on its new data centre facility at its 1-acre site at Profile Park. The company has started work on the first of eight turnkey data centre suites contained within four buildings on the site, which when completed will total approximately 18, sq m with a power capacity of over 15MW. Other development news saw Data Valley Enterprises report that it was to invest some 6 million to build a data centre plus three power stations with a total capacity of 75 MW in Tallinn, Estonia. The company wants to establish a 3, sq m server farm which is planned for completion in 217. Meanwhile, former Sentrum partner Franek Sodzawiczny announced that his vehicle Zenium Technology Partners had secured the backing of private investment fund, Quantum Strategic Partners, to develop a global data centre portfolio, the first project being a development project in Istanbul, which will provide 12, sq m of raised floor space to be operational later this year. Q4 213 European Data Centres MarketView 3

4 Q4 213 European Data Centres MarketView TAKE-UP & DEMAND COLOCATION MARKET HIGHLIGHTS 213 as a whole proved to be a largely stable year in term of aggregated take-up across Europe's major markets with a small annual decline recorded by the close. Total colocation take-up for the year finalised at 42,652 sq m, 5% less than in 212, although the second half of the year brought many positives that will carry through into 214. An increase in the level of new enquiries became apparent from the mid-point of the year although transaction volumes took some time to reflect the more positive tone of the market. A total of 65% of total take-up was completed in H2 213, with 46% of the annual transactional total concluded in the final quarter. The driver behind the increase is an improving business outlook which is now serving to reassure corporate occupiers to making investment decisions with regard to future growth requirements. Typically the corporate stance since 28 has been to constrain costs and achieve new efficiencies where possible. However with technology touching every operational part of modern businesses, preparation for a return to a more prosperous business environment has become more pressing. Companies are now assessing opportunities to expand and modernise IT infrastructure to ensure a competitive edge can be maintained. Gaining improved efficiency remains firmly on the corporate wish list and is here to stay with use of cloud integral to achieving this. Cloud-based requirements in particular have continued to feature highly in take-up analysis of 213 with cloud service providers now significant sources of new business for colocation operators. Many operators themselves have also added a cloud service. With corporate confidence recovering it is of little coincidence that the major corporate hubs of London and Frankfurt have returned improved results in 213. Following a weak 212, demand for London retail product returned strongly with take-up double that of the previous year. The end of year total of 7,531 sq m is back aligned with the longer term average where London retail demand has typically been consistent year on year. Several larger contracts were also awarded in London during the 213, with wholesale transactions accounting for 6% of the year-end total. Equally Frankfurt has experienced consistently strong market interest during 213 recording the highest level of space transacted in 4 years. Total take-up in the city was 11,377 sq m, 2% higher than achieved in 212. In addition to returning corporate enquiries, connectivity-driven requirements are more commonplace market with ISPs, cloud and digital media occupiers active in 213. A set of mixed results were recorded in the other major markets of Europe. Amsterdam continues to receive high levels of interest although the level of space transacted fell in 213 as a result of fewer large transactions concluding during the year. Both Paris and Madrid continued to experience greater challenges in terms of wider economic environment which served to undermine business confidence. With an improving economic outlook for much of Europe forecast for 214 we expect that all markets will benefit from renewed optimism. Charts 4 & 5: Historic Take-up Analysis Total Take-up by Market Sector (Sq M) Colocation Take-up by Location (Sq M) 12, 8, 1, 8, 7, 6, 5, 6, 4, 4, 2, 3, 2, 1, retail colo wholesale colo London Amsterdam Frankfurt self build threat stock Paris Madrid

5 TAKE-UP & DEMAND MARKET NEWS ROUNDUP Improving market sentiment throughout 213 appears to be underpinned by activity amongst corporates, either through the direct take-up or development of data centre space, or the use of third party service providers to satisfy their requirements for IT infrastructure and services. Whilst the public announcement of enterprise self-builds can be scarce due to corporate secrecy, we have seen some notable reported activity of this kind during the year. For example, French banking group BNP Paribas announced that it has started construction on two new data centres at Vaux-sur-Sûre and Bastogne in Belgium, investing some 2 million. In addition, Google confirmed that it will invest a further 45 million on a data centre expansion in south-eastern Finland, whilst in Russia it was reported that Sberbank, the largest bank in Russia and Eastern Europe, will start the deployment of its new 7, sq m Skolkovo technology park facility in Moscow. We have also seen a strong direct take-up of colocation space in the European markets, a trend which is set to continue as IT budgets become less constrained in a more confident economic climate. For example, in the last quarter of the year Russian bank, Orient Express Bank, announced its decision to outsource its data centre functions to the DataSpace facility in Moscow, whilst one of the largest financial groups in Norway, DNB secured space at the Green Mountain Data Centre in Stavanger. In the UK, InTechnology secured a deal with fresh produce supplier Poupart, whilst Norse Group selected MigSolv's Gatehouse Data Centre near Norwich, whilst the new Scottish internet exchange IX Scotland contracted with Pulsant at its South Gyle data centre in Edinburgh. Q4 213 European Data Centres MarketView The outsourcing dynamic has ensured a healthy demand for technical real estate from IT integrators who continue to play an ever-increasingly important role in the take-up of data centre space. For example, during the course of the year Amazon Web Services opened a new network facility in Eircom's Clonshaugh data centre in Dublin whilst Google reported that it will invest 3 million to expand its European data centre in Belgium in order to meet growing demand for its online services. In addition, during Q4 we have seen NaviSite Europe announce that it has signed two long-term leases with Digital Realty at its data centres in Woking and Redhill in the UK. Whilst the exact implications that a single IT services deal between integrators and corporates has on data centre takeup is difficult to extract, the buoyant nature of the IT services market in Europe will contribute to the filling of data centre space of the IT integrators, and ensure that they will continue to look to replenish supply. 5 For instance, in the UK, the final quarter of the year saw Fujitsu sign a 1-year deal with United Utilities to supply data centre services in Warrington and Manchester, whilst CGI won an IT infrastructure services deal with the Central & North West London NHS Foundation Trust. Outside the UK, IBM reported that they had been successful in winning a contract to provide IT operation services on a global basis to Allianz to consolidate their current 14 data centres worldwide to just six, whilst in Germany, Tata Consultancy Services was selected by Bombardier Transportation to manage its IT infrastructure for newly commissioned data centres. Also in Germany, BT announced it has renewed and extended its contract with mobile operator Telefónica Deutschland to provide hosting capacities in 17 locations. 5

6 Q4 213 European Data Centres MarketView TAKE-UP & DEMAND INVESTMENT AND OUTLOOK Investment Whilst the demise of integrator and data centre owner 2e2 in the first quarter of 213 provided evidence that the IT sector is not immune to the wider economic conditions, activity amongst investors within the IT industry and specifically the data centre market has proved to be buoyant throughout the year, as the sector has raised its profile amongst equity investment funds and specialist real estate trusts. Some of the notable data centre investment transactions during 213 included Securus Data Property Fund which acquired a 5% stake in Citadel 1 Datacenters Limited, a 6,4 sq m Dublin data centre; Digital Realty s acquisition of a three-property data centre portfolio in Paris from Bouygues Telecom for a reported price of 6 million, and UK private equity group, Evans Randall, who paid a reported million to the developer of the 13,75 sq m Telecitygroup data centre near Schiphol airport, Amsterdam. In the final quarter of 213, US REIT W.P. Carey acquired the office headquarters and data centre facility of clothing retailer Adler Modemarkte in Haibach, Germany for a reported 22 million. Also in the fourth quarter of the year we saw the continuation of significant corporate mergers and acquisitions. One of the largest transactions saw Deutsche Telekom report its purchase of voice and data specialist GTS Central Europe, for a total consideration of 546 million. In the UK, iomart Group followed up its earlier acquisition of managed service provider Redstation with that of Backup Technology, a Leeds-based provider of cloud backup and disaster recovery services for a reported 23 million. In addition, telephony provider, Coms, confirmed the completion of the purchase of ICT infrastructure and data centre business Comunica Holdings for a reported 9.5 million, whilst UK integrator and hosting provider, MDNX Group, announced its agreement to acquire the entire issued share capital of managed networking and cloud provider Easynet. Forecast During the course of 213 the data centre industry has remained buoyant, with the broad indicators for 214 suggesting that the market should continue to grow at a relatively strong pace, driven by corporate demand for enhanced IT services. For instance, recent forecasts from Gartner suggest that worldwide IT spending is expected to grow by 3.1% in 214, whilst research house UDC indicates this figure could be 5% with spending reaching US$2.14 trillion, aided by continued economic growth in the United States and Europe and a rebound in China. The trend towards third party provision of services in the wider IT market looks set to underpin the take-up of data centre space, with Information Services Group recording the highest ever number of outsourcing contract values in the Europe, Middle East & Africa (EMEA) region during the third quarter of 213, up some 6% on the preceding quarter. In addition, the move to the cloud is expected to continue apace with research from Cisco suggesting that cloud traffic will represent more than two-thirds of global data centre traffic by 217 and survey evidence from colocation provider Interxion indicates that over half of European hosting providers respondents expect 4-1% of their revenue to come from cloud services in 215, a 93% increase from that recorded in 212. So the indicators are encouraging that growth in demand for IT services, and in particular cloud services, is set to continue, which will have a positive effect on the demand for data centre space. Indeed, according to a recent Research and Markets study worldwide spending on data centre services by SMEs is expected to grow by over 18% this year, a figure that solution providers feel may be conservative bearing in mind the demand that is being experienced from corporates wishing to off-load data centre management. On a geographical basis, whilst traditional tier 1 markets should continue to attract their fair share of data centre demand, more immature markets are expected to see strong growth during the year. For instance Poland, Czech Republic, Romania and Hungary have all been highlighted by recent research from data centre consultancy, BroadGroup, as being potential beneficiaries with estimates that their stock could increase by up to 7% by

7 MARKET FOCUS LONDON Data centre take-up in London rose by 26% during 213 following the award of several large contracts and an upturn in retail leasing activity. Total colocation take-up reached 18,639 sq m by year end with wholesale requirements accounting for close to 6% of total space transacted during the year. The agreement secured by Digital Realty to supply Rackspace with a new 1MW data centre was the largest deal of the year; this accompanied other awards such as the Ministry of Justice contract at Ark Data Centres and served to underpin wholesale take-up in the UK capital. A sharp upturn in retail leasing activity was also a feature of 213 following a weak 212. Total take-up of retail space was more than double that of the previous year, with the year-end total of 7,531 sq m consistent with the longer term average. Most notable from 213 has been the renewal of an optimistic business approach from end users in the UK capital which began to translate into new data centre enquiries toward the second half of the year. Greater positivity toward the outlook of domestic and international business environments has meant that perhaps for the first time since 28, major corporates are considering expansion opportunities as opposed to cost reduction and constraint. The level of new enquiries and transactions recorded reflects this change of attitude. Transactions concluded in H2 213 represent close to 75% of the yearly total. The renewed optimism is expected to continue in 214 with operators that have new and available space being well positioned to benefit. The sharp rise in build activity in 212 has not been repeated in 213 with total supply rising by 14,674 sq m compared with 27,8 sq m the previous year. Overall available supply has slightly fallen during 213 although London retains the highest vacancy rate of the major European markets at 16.65%. The combination of a rise in demand and a gradual decline in available supply into 214 could mean that price levels will begin to firm later this year following the heightened competitive environment of 213. Q4 213 European Data Centres MarketView FRANKFURT 7 Consistently strong market interest for data centre services in Frankfurt during 213 has resulted in the highest level of take-up in the city for 4 years. The total level of transacted space rose to 11,377 sq m highlighting a 2% annual increase when compared to 212. When this total is considered proportionate to market size, Frankfurt has therefore been the best performing of the major markets in 213. At the forefront of new demand in 213 has been cloud. The main growth in cloud uptake has been fuelled domestically by Frankfurt's considerable corporate population which is showing signs of returning to the market. Data centre operators are benefitting from newly grown capacity requirements as CIOs change focus toward future expansion. The employment of hybrid IT models has become the corporate norm and this is translating into direct acquisition of space and subsequent expansion of private cloud providers to service new contracts. Frankfurt's success in 213 has also been driven by growing connectivity requirements. Industries such as digital media and public cloud services continue to grow rapidly where access to multiple networks is a prerequisite. Domestic markets for these services are well established, however Frankfurt is increasingly viewed as a key location to service growth markets such as Eastern Europe. With market activity having risen sharply, it is of little surprise that availability at data centres has dipped during the year. By the close of the year overall vacant supply has fallen to 9.95%, a historic low for the city, and the lowest level of any of the major markets. The decision by Interxion to bring forward their plans for FRA8 and FRA9 is one example that highlights the need to bring new space on quickly to take advantage of the upturn in demand. Moving in to 214 we can expect further announcements of capacity expansion from the major providers. 7

8 Q4 213 European Data Centres MarketView MARKET FOCUS PARIS Demand for data centre space in Paris remained subdued during 213 with positive end user sentiment undermined by weakened business confidence and concerns derived from the eurozone's performance. Total take-up for the year recorded a reduction from 212 at 5,631 sq m by year end. Last year saw the delivery of option space for clients boosting the final total. Excluding this, results for 212 and 213 would be have been similar. The flat-lining French economy has been the biggest barrier to any increase in letting activity. The Paris data centre market is dependent on locally situated corporate demand where zero percent growth and the potential for an increase in government austerity measures has encouraged corporate apathy toward new IT investment. Growth industries such as cloud have not so far had a significant influence on data centre transactions levels. Major cloud providers are choosing to locate in alternative major European internet exchange points such as London, Frankfurt Amsterdam. 214 however appears to have a positive outlook. Economic indications appear to be more positive with France revising upwards growth expectations for the coming year. The end of 213 did record the completion of a large scale corporate transaction for data centre space providing indication that corporate constraint on spending may be weakening. AMSTERDAM In 213, Amsterdam continued to attract a high level of new enquiries although at year end the level of transacted space recorded was below that of the previous two record years. Total take-up in the city for the year was 6,242 sq m marking a return to a level close to the longer term average. Transactional activity in 213 has been characterised by a regular supply of smaller sized requirements often including future growth options. The one-off larger transactions have been fewer in number and it is these that have underpinned the record take-up seen in recent years. MADRID Market activity in Amsterdam has continued to be driven by connectivityled demand. Typically the Telecoms, Media and Technology companies are most active with the corporate landscape significantly smaller than in the other major European data centre markets. Government and public organisations have also brought new requirements in 213. The most recent example of this is the contract award by Surfsara to Telecity. On the supply side the strong levels of demand in recent years have encouraged operators to bring on new space. Similar to other data centre locations a sharp rise in new supply was recorded in 212 followed by a relative slowdown in 213. Market supply grew by just short of 9% during the year thus maintaining the highest supply growth rate of major markets recorded an improvement to market activity in Madrid although in comparison to the other major markets demand for third party colocation space remains low. Total take-up for the year rose to 764 sq m up 3% on the previous year. Typically new requirements brought to market in 213 have been small scale and thus a steady flow of rack sales has resulted into a relatively low total. The positive news to emerge from 213 is that the Spanish economy is starting to display an improving outlook and this can only benefit leasing activity moving forward. Corporate resistance to outsourced solutions remains higher in the city than in other major locations although as corporates explore opportunities to maximise cost efficiency the outsourcing of data centres and utilization of cloud should gain favour. Turning to supply, the level of carrier neutral space has remained unchanged during the year, the last release of new space being Interxion's Madrid 2 in 212. In 213 however, Telefonica opened their new data centre offering colocation services and competition to the carrier neutral providers. Most recently Interoute announced the opening of their new data centre highlighting the opportunity that could exist as centrally located companies embrace cloud technology.

9 KEY STATISTICS EUROPEAN TIER 1 LOCATION SUPPLY SQ M AVAILABILITY SQ M VACANCY RATE % COLOCATION TAKE-UP QUARTERLY COLOCATION TAKE-UP YEAR TO DATE London Q ,52 48, % 9,846 18,639 Q ,846 51, % 2,543 14,847 Frankfurt Q ,512 15, % 4,32 11,377 Q ,458 21, % 3,732 9,444 Paris Q ,674 1, % 2,58 5,631 Q ,51 12, % 2,893 8,431 Amsterdam Q ,156 14, % 2,738 6,242 Q ,187 11, % 7,73 11,663 Madrid Q ,64 1, % Q , % European Tier 1 Total Q ,926 9, % 19,461 42,652 Q ,63 97, % 16,955 44,971 Q4 213 European Data Centres MarketView EUROPEAN MARKET ACTIVITY LOCATION QUARTER London Frankfurt Paris Amsterdam Madrid Virtus has begun construction work on its new data centre in Hayes, West London. NaviSite Europe has signed two long-term leases with Digital Realty's data centres in Woking and Redhill. Netwise Hosting has secured a new site near Bermondsey, central London for the company's new 1, sq m data centre. As part of plan to increase the number of global data centres by four, Oracle will open a new facility in Germany Interxion announced that it will construct its ninth data centre on its Frankfurt campus FRA 9, which is scheduled to be operational in the first quarter of 214, adding 8 sq m of equipped space Equinix announced it has acquired the Kleyer 9 carrier hotel, located in Frankfurt French Energy company EDF has chosen Bull and Osiatis to deploy and run the world's biggest private cloud-based infrastructure with Microsoft technology, hosted at two of EDF's data centres. Outside Paris, French telco TDF has now opened its second ProxiCenter in Lille. The facility in Lambersart has an area of 8 sq m Also outside Paris, Orange has built a 16, sq m data centre in Val-de-Reuil, France, including 5, sq m of computer room space. Digital Ocean is adding to its European capacity with its second major data centre in Amsterdam. The new AMS5 data centre brings 5 more physical servers online. Switch Datacenters Amsterdam is expanding its Amsterdam facility by more than 1, sq m. Interxion has announced that it is constructing its seventh data centre in Amsterdam. AMS 7 will be built in six phases, with the first four phases providing approximately 4,6 sq m of equipped space. Japanese IT services company NTT, has announced it is to buy everis Group, an independent Spanish consulting and IT services provider. 9 9

10 Q4 213 European Data Centres MarketView MARKET FOCUS COLOCATION SUPPLY WATCH London 35, 3, 25, 2, 15, 1, 5, Q4 2% 18% 16% 14% 12% 1% 8% 6% 4% 2% % Frankfurt 18, 16, 14, 12, 1, 8, 6, 4, 2, Q4 25% 2% 15% 1% 5% % Paris Amsterdam 12, 1, 8, 6, 4, 2, Q4 14% 12% 1% 8% 6% 4% 2% % 12, 1, 8, 6, 4, 2, Q4 25% 2% 15% 1% 5% % Madrid Key 35, 3, 25, 2, 15, 1, 5, Q4 4.5% 4.% 3.5% 3.% 2.5% 2.% 1.5% 1.%.5%.% Supply (Sq M) Vacancy (%) 1

11 DEFINITIONS COLOCATION TIER 1 MARKETS Amsterdam, Frankfurt, London, Madrid, Paris STOCK Colocation stock: carrier neutral data centres where the operator allows any carrier to connect into the facility and to connect to third parties within the facility, not discriminating between different carriers and charging only nominal fees for interconnection. This is split into two distinct offerings: Retail colocation: targets smaller requirements typically sold as racks, cages or suites in terms of floor space/it power and offers an element of at least smart hands and eyes. Colocation stock includes both fitted and shell expressed as a net technical floor space/it power equivalent figure. Wholesale colocation: targets larger requirements in terms of floor space/it power typically 5kw (35 sq m) to 1MW (7 sq m) and offering real estate FM services only. Held in shell prior to contract, includes both fitted and shell expressed as a net technical floor space/it power equivalent figure. Q4 213 European Data Centres MarketView SUPPLY Retail colocation supply excludes un-built phases of the data centre i.e. only fitted raised floor space is included. Wholesale colocation supply includes both fitted and shell data centre space. Typically wholesale operators sell shell space which is built out to suit customers. Availability of space and vacancy rates are based on both fitted and shell space. AVAILABILITY Retail availability of space is based on vacant fully fitted space only. Wholesale availability is based on all vacant space. VACANCY RATE The vacancy rate is a product of availability/total supply. COLOCATION TAKE-UP This comprises data centre space committed to at retail and wholesale colocation facilities in the relevant quarter. TOTAL MARKET TAKE-UP This comprises of colocation take-up (retail and wholesale), significant secured data centre space classified as Self-build or Threat stock (either surplus carrier or corporate facilities). Self-build: typically land for development or modern empty warehouse which is acquired for conversion to a data centre for use by an end-user which will use the space for their own purposes e.g. a large bank. Threat stock: surplus carrier/webhosting space offered to the market as competing stock on a carrier neutral basis SPACE TYPE Shell: shell & core space is the base real estate of a data centre, a wind and watertight structure with exposed floor and ceiling slabs and exposed finishes to the walls. The landlord would obtain permissions for data-centre use and make provisions for tenants to install their own chillers and back-up power generating equipment. In addition, an incoming diverse raw HV (high voltage) power supply would usually be provided. Fitted: fully-fitted space is ready for tenant IT equipment to be installed almost immediately or subject only to minor works being carried out to account for bespoke equipment and layouts

12 Q4 213 European Data Centres MarketView CONTACTS Andrew Jay Head of Data Centres Global Corporate Services CBRE 1 Paternoster Row London EC4M 7HP t: +44 () e: andrew.jay@cbre.com DATA SOURCE Martin Carroll Director Global Corporate Services CBRE 1 Paternoster Row London EC4M 7HP t: + 44 () e: martin.carroll@cbre.com CBRE in association with Jonathan Heap, Director, ixnewssearch Darren Mansfield Analyst Global Corporate Services CBRE 1 Paternoster Row London EC4M 7HP t: + 44 () e: darren.mansfield@cbre.com ixnewssearch is the leading daily news research service developed for organisations with a strategic interest in the data centre and mission critical facility industries. Groundbreaking at its inception in 21, the interactive ed document is packed with global news providing invaluable and timely insights into the business of data centres. CBRE DATA CENTRES CBRE formed a Data Centre team in 1994 to address the specialised technical real estate needs of high-tech firms such as telecommunications companies, data centre operators and corporates. Core technical real estate services provided by the Data Centre team include: Investment Disposal one-off assignments, multi-site marketing campaigns Acquisition one-off assignments, worldwide network rollouts Consultancy consolidation strategies, Mergers & Acquisitions Asset Valuation Bank, Corporate Project Management, Development Monitoring, Due Diligence, Building and M&E surveys Research market reports, statistics, take-up forecasting CBRE has monitored worldwide Colocation supply statistics since This bulletin relates only to the European Colocation Tier 1 markets. Additional market statistics are available on request. + FOLLOW US GOOGLE+ LINKED IN TWITTER 12 Disclaimer CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.