European Data Centres MarketView

Transcription

1 29 Q2 21 Q2 211 Q2 212 Q2 213 Q2 214 Q2 European Data Centres MarketView Q2 214 CBRE Global Corporate Services SUPPLY +9.3% y-o-y Jun 14 AVAILABILITY -3.7% y-o-y Jun 14 COLOCATION TAKE-UP +12.3% y-o-y Jun 14 STRONGEST H1 ON RECORD FOR EUROPEAN DATA CENTRES 1 Quick stats AS AT QUARTER Supply Availability Colocation take-up quarterly Colocation take-up annual YTD Headlines Highest H1 take-up recorded Mid year take-up in Frankfurt more than double that of H1 213 H1 take-up in Amsterdam now higher than the total for 213 Data centre expansion activity increasing In this issue Executive Summary Supply & Availability Take-up & Demand Market Focus London Frankfurt Paris Amsterdam Madrid Key Statistics Definitions 754MW 142MW 1.8MW 38MW EXECUTIVE SUMMARY Beginning this quarter we have rebased our data centre market statistics and will from this point report in power (Kilowatts kw and Megawatts MW) as our preferred standard metric. It is our opinion that this step will not only align our market commentary with current industry reporting practices but also facilitate analysis and comparison to other sources of available market information. A combination of stable letting activity in the second quarter and an exceptionally strong Q1 has resulted in colocation take-up for H1 reaching unprecedented levels. A total of 38MW was sold in the first half of 214, 68% higher when compared than at the equivalent stage in 213 and the highest total recorded for an opening six month period. Connectivity-led demand continues to be the principal source of larger transactions with cloud and associated companies particularly active this year. A build-up of enterprise demand is now also beginning to generate new market interest. The highest take-up this year has been in Frankfurt and Amsterdam. In Frankfurt 13.2MW has been sold in 214, more than twice the amount transacted in the same period of last year. Take-up in Amsterdam now exceeds that achieved in the full year of 213. At mid-year a total of 11.7MW has been sold, the highest H1 total recorded. Across the markets, operators continue to make prudent investment decisions with regards to new data centre capacity. At the end of the second quarter an additional 44MW has been added to European supply in 214 which compares to 3MW in the same period of 213. This statistic indicates an acceleration in development of new capacity particularly focussed on the stronger markets led by both existing and new customer demand. EUROPEAN TIER 1 COLOCATION MARKET AS AT Q Supply (MW) LHS Take-up (MW) RHS

2 Q2 214 European Data Centres MarketView SUPPLY & AVAILABILITY COLOCATION MARKET HIGHLIGHTS The sharp uplift of new data centre capacity recorded in the first quarter has not been repeated in Q2 and although several small additions have been made stronger letting activity has meant that total availability has fallen. Total supply at the halfway point of 214 amounted to 754MW of which 142MW was available for customer purchase. A review of availability recorded in recent years suggests that despite the reduction in Q2, overall the current level remains high, and it is our opinion that surplus capacity could sustain pressure on pricing in some areas. Driving the higher level of vacancy is an increase in the rate at which new capacity is released to the European market. As at the end of Q2 44MW had been added to European supply in 214 compared with a total for the year of 51MW in 213. Increase in operator build activity is for the most part being led by stronger customer demand which will provide a counter balance to maintain market equilibrium. London currently has the highest level of vacancy in Europe. Total availability recorded at the end of the second quarter has increased to 75MW of customer power, a historic high. The significant wholesale presence in the city somewhat distorts this figure making comparison difficult. However, analysis of retail facilities in isolation indicates that although London still has the highest amount of available customer power, this remains proportionate to annual levels of takeup. The markets of Frankfurt and Amsterdam continue to attract particular focus from operator investment programs in 214. Both of these cities are currently experiencing particularly strong customer demand and this is encouraging a sustained series of new build out programs. In the first six months of this year an additional 8.6 MW of new capacity has been released in Amsterdam, the majority coming with the opening of the final phase of Telecity's AMS 5 facility. In Frankfurt a further 11.5MW has been added with the acceleration of Interxion's FRA8 contributing to this rise. Due to an increased level of customer orders however availability in both cities remains consistent with 12 months ago. Looking ahead, the development schedule over the coming 12 months indicates the completion of some significant schemes across the major markets. The rise in total capacity is likely to be close to 75MW. Included in that is the first phase of the Equinix LD6 facility with a capacity of 1,385 cabinets which is due to open in the first half of 215 and the new 11MW Virtus facility at Hayes which is due for completion by the end of this year. In Frankfurt the 4,4 sq m second building of the e-shelter Frankfurt 3 campus is scheduled for Q1 215 and Interxion expect the final two phases of their FRA8 facility in the first half of 215. Charts 2 & 3: Historic Colocation Supply 2 Colocation Supply and Availability (MW) Q2 Contracted Power Available Colocation Supply Annual Increase (MW) YTD 214 New Supply

3 SUPPLY & AVAILABILITY MARKET NEWS ROUNDUP As leading economic indicators of growth, inflation and employment data continue to point towards a more widespread economic recovery across Europe, prospects for the technical real estate market also continue to be characterised by a degree of overall positivity. This ongoing buoyancy of the data centre industry has encouraged new product to be delivered to the market during the second quarter of the year as well as some significant requirements being satisfied. Both retail and wholesale colocation providers have continued to announce a series of openings and expansions of data centres during the period. Indeed the boundaries between these two types of data centre provider have become increasingly blurred as both have become increasingly willing to offer a product that has traditionally been the territory of the other. Colocation provider, Interxion reported that it had brought forward the delivery of two further phases totalling approximately 2,6 sq m of equipped space at its AMS 7 facility in Amsterdam, whilst in Frankfurt, it will accelerate the completion of the two remaining phases of the FRA 8 data centre to provide a further 1,8 sq m. Elsewhere in Europe, Equinix announced the start of fitting out its new ZH5.2 data centre project in Zurich which is set for completion by the end of this year, whilst in Sweden, DigiPlex received planning consent to build a 6, sq m technical facility on a former factory site in Upplands Vasby. When completed the facility will become Stockholm's first data centre offering over 2MW of power sourced from renewable hydro and wind, offering both retail and wholesale space. In France, data centre group, CHOREUS Datacenter has started construction of its new Paris area facility which it is claimed will be the first such data centre to be powered by trigeneration gas. The facility will eventually comprise 8 units of 5 sq m technical floor space each, whilst TDG opened a new facility in Rennes and reported that it would open a new data centre in Aix-Marseille later in the year. Elsewhere, BT announced the opening of its third 1,2 sq m data centre located in Rotterdam, whilst in Austria Linz AG Telekom opened a new 44 sq m facility and in Switzerland, Tochter Fiber Services, a subsidiary of Swiss power company CKW, reported that it intends to open a new 1,2 sq m facility in Lucerne which is expected to go online in mid 215. The data centre has already secured the Swiss insurer Suva as a tenant. In Moscow, Russian mobile operator, MTS opened a new 1,5 sq m data centre at a reported cost of some RUB 6 million and in Poland, local telco 3S expanded its data centre in Katowice and announced plans for a new facility in Bytom whilst IT company, Qumak completed a new data centre in the city of Grodzisk. In the Czech Republic, search engine company Seznam.cz, has purchased a site on the industrial park in the eastern suburbs of Prague, and intend to build a 2,5 sq m data centre. Reports of development activity in the second quarter of the year particularly on a speculative basis remain limited. Within the UK, for example, the main example to note saw Scottish property company AOC Group submit its planning application for a 6,97 sq m data centre at Queensway Business Park in Glenrothes, Fife. Q2 214 European Data Centres MarketView In Estonia, Astrec Data is hoping to attract Russian IT companies to the new 1,6 sq m data centre it is building in Jõhvi in the north-east of the country. Elsewhere in the Baltics, the Latvian data centre company DEAC is set to invest in a new facility to be built in Riga. Being one of the strongest sectors driving the data centre market over recent years, IT integrators, carriers and hosting companies continued to report expansions and new builds during the quarter. For example, in Italy, local ICT provider, Fastweb announced plans to invest some 25 million in two new data centres in Milan and Rome and in Scandinavia the UK hosting company Hydro66 announced that it has made a significant investment in a data centre in Boden, located close to the Arctic Circle in northern Sweden. 3 In the UK, Iomart opened a 1,5 sq m extension to its Maidenhead data centre adding capacity for a further 63 racks, Zen Internet completed the next phase of its North West Data Centre, whilst Colt reported that it has expanded its Welwyn Garden City facility by 1 sq m of technical space. In addition, the same company announced that it would expand its Hamburg facility by a further 565 sq m. 3

4 Q2 214 European Data Centres MarketView TAKE-UP & DEMAND COLOCATION MARKET HIGHLIGHTS Take-up in H1 highest on record. An exceptionally strong beginning to the year followed by steady letting activity in Q2 has meant that at the mid-year point the total amount of transacted power has surpassed the highest recorded half year total. Take-up in the second quarter amounted to 1.8MW, on par with the five-year average for this period. However the year-to-date total has now reached 38MW, a historic high for the H1 period and a total which serves to substantiate the noticeable improvement in customer demand for this year. Continuing to drive demand across the major markets in Europe is connectivityled requirements from content, telecoms and cloud providers. Cloud providers in particular have been especially active, securing data centre capacity aimed at servicing expectant growth in demand from end-user groups. Interxion noted in their Q2 earnings presentation that cloud platform providers currently make up approximately 25% of their business. This provides an example of the growing relationship between cloud and colocation businesses. Given the importance placed on connectivity it is of little coincidence that the markets of Amsterdam and Frankfurt are experiencing the strongest levels of demand. Frankfurt currently has recorded the highest amount of take-up of any of the major markets. A total of 13.2MW has been transacted so far this year which is just short of the 14.7MW of contracts awarded in 213. In Amsterdam take-up now exceeds that achieved in the full year of 213. At the halfway point 11.7MW has been sold, the highest total on record for an H1 period. Take-up in Europe's largest market, London, currently lags behind both Amsterdam and Frankfurt. A total of 8.6MW has been transacted so far this year, which compares to the 8.3MW in H However, a considerable amount of latent demand has built up in London which is currently generating a rise in the number of new requirements coming to market in 214. It is our opinion that the latter half of this year will see many of these complete resulting in improvement to take-up. Although commented upon in relation to the London market in this publication, the topic of churn is likely to have influence on new business for all operators moving forward. Customer retention levels remain exceptionally high for data centre operators due to the extreme complexity, cost and risk associated with moving IT infrastructure. However, upcoming lease events in some cases will involve a customer desire to reduce their IT footprint and benefit from the gap between renewal rates and current market rates. In instances of where location flexibility is present, this may encourage some customer movement which in our opinion presents an additional source of opportunity for operators to win new custom. Charts 4 & 5: Historic Take-up Analysis Take-up by Market Sector (MW) Take-up by Location (MW) YTD 214 retail colo wholesale colo YTD London Amsterdam 214 Frankfurt Paris Madrid

5 TAKE-UP & DEMAND MARKET NEWS ROUNDUP The second quarter of 214 has seen levels of take-up of technical real estate remain buoyant, continuing the confidence that was evidenced during the first three months of the year. The improving economic landscape across Europe continues to benefit the industry as companies plan for growth and execute IT strategies. Increasingly the use of third parties continues to play a lead role in the take-up of data centre infrastructure as corporates embrace IT integration and outsourcing solutions. It is unsurprising therefore that these types of occupiers and operators of technical facilities were involved in much of the most notable take-up of data centre space over the quarter. For example, BT has announced the expansion of its data centre capacity in France, taking space in the new recently opened Equinix facility in Paris, whilst Indian telecommunication services provider, Tata Communications, expanded its global data centre footprint through a strategic partnership with Interxion in Germany and Austria, and Zenium Technology Partners confirmed that Turkey's largest systems integrator has entered into a lease agreement to secure space around 48 sq m in Istanbul One Zenium's data centre in Istanbul. In the UK, Naglotech chose City Lifeline's London data centre to operate its managed IT operations whilst C4L announced the signing of a three-year deal with Pulsant and City University London expanded its presence at Custodian Data Centres' facility in Maidstone. In addition, Next Generation Data Centres continued to add to its facility after securing AirVM and Azla as clients. Of course, large enterprises are also been willing to take space directly themselves or through retaining control of the systems that sit on the IT platform. For example, in Ireland, Dublin County Council granted planning permission for a second data centre for Google located adjacent to the company's existing facility in the city which will include the construction of a 3,361 sq m facility, whilst German software firm, SAP reported that it will invest in two data centres in Russia in a bid to expand its cloud service offering in the country. In Norway, Green Mountain completed building a Tier III data centre in Rjukain which it let to the Norwegian banking group, DNB and in Belgium, ICTroom has announced it has won a contract to supply a 2 MW data centre for a Belgian government department. Q2 214 European Data Centres MarketView Much of the rise in activity amongst IT integrators and hosting providers is driven by the need to supply European and global enterprises with IT services and support. The past three months has seen a number of notable examples of these types of transactions. For example, IBM together with Fiat, Chrysler Group and CNH Industrial has announced a multi-year strategic services agreement to manage the IT infrastructure and services that support dayto-day operations and locations on a global basis. Other examples saw BT win a contract with De Beers Group to orchestrate a wide range of IT services across 7 sites, including exploration and mining locations across the world, whilst CGI announced the renewal and expansion of its contract with energy producer EDP to provide data centre and infrastructure management services and DNB signed an agreement with HCL Technologies that will see HCL manage the IT infrastructure services and application operations for all DNB businesses across Norway and its key international locations. 5 Retail colocation providers also enjoyed a busy quarter with their readily available product proving an attractive proposition to many. For example, Interxion reported that it will provide Minds + Machines with data centre services in Dublin, whilst also securing Dutch ICT solution provider Ctac as a client in its Amsterdam facility. Also in Holland, EvoSwitch announced that Detron had chosen it for the expansion of its data centre footprint, and The City of Amsterdam chose KPN to provide colocation services for its infrastructure in its Almere facility. 5

6 Q2 214 European Data Centres MarketView TAKE-UP & DEMAND INVESTMENT AND OUTLOOK Investment One of the characteristics of the data centre market during the second quarter of 214 is the amount of merger and acquisition activity, reflecting the on-going consolidation of market and the desire for investors to inorganically increase exposure. Notable deals in Europe during the period saw French IT providers agree a deal which will see Stora buy Steria for a price estimated at 73 million, whilst also in France, French integrators Atos announced that it will pay around 62 million to acquire Bull. On a global basis, Level 3 acquired tw telecom for a reported US$5.7 billion whilst the US fibre network company Zayo Group bought French provider, Neo Telecoms and UK based Geo Networks Ltd during the quarter. Other notable transactions saw UK based provider of managed services and colocation company Pulsant bought from Bridgepoint Development Capital by private equity firm Oak Hill Capital Partners. Terms of the transaction were not disclosed but media reports suggest the deal could be in the region of 2 million. In addition, Manchester-based infrastructure provider M247 acquired Web.Solutions Direct for an undisclosed seven-figure sum. Elsewhere in Europe, Claranet acquired the Dutch cloud services provider NovaData for a reported 7 million whilst also in Holland IS Group announced the acquisition of cloud hosting provider WideXS. The Channel Islands based communications provider Sure, reported that it will acquire Foreshore, a Jersey based data centre and cloud services provider whilst Capita has acquired IT network services provider Updata Infrastructure (UK) Limited for a cash consideration of 8 million. Forecast As prospects in the economies of Europe continue to improve, albeit against a background of escalating Middle East conflict and a destabilised Ukraine, the data centre market should continue to grow. Recent research from Gartner suggests that global IT spending will rise by over 2% to US$3.7 trillion in 214. They do note, however, that data centre system spending will be the slowest growing category in 214, rising only.4% to US$14 billion due to factors such as lower-cost storage options in the cloud and a move away from high-end server systems. Growth in spending on cloud services and products is set to be an important component of this as enterprises move their information technology service applications and infrastructure to a cloud-based architecture. The public cloud services market for example, is expected to reach US$191 billion in revenues by 22, more than tripling the US$58 billion in revenue in 213, according to a recent report by Forrester Research. A new survey commissioned by Digital Realty indicated further positive news for data centre capacity growth for European companies. In the research undertaken by Forrester more than 9% of respondents indicated they are planning some form of expansion within the next four years. More than one-third (38%) of respondents expected their existing data centre budget to grow between 5-1% in the next 12 months, with an additional 7% of respondents expecting to increase their data centre budget by more than 1% in the next 12 months. 6 In addition, the quarter also saw a number of significant examples of companies raising finance to help fund expansion programmes. In the UK, DataCentred announced that it secured combined funding from the Greater Manchester Investment Fund, venture capitalist Jon Moulton, Perscitus Advisers, and The North West Fund for Venture Capital. Also Liverpool based data centre provider, Aimes secured funding from Santander and Skyscape Cloud Services Limited secured a 4 million minority stake investment from Business Growth Fund to accelerate its growth in the UK public sector market. This type of activity was not limited to the UK. In Russia, Moscow data centre operator, ixcellerate increased investment from an existing investor, Sumitomo, and DigiPlex became the first to launch a bond transaction to finance the construction phase as well as providing long-term financing for its newest data centre located just outside Oslo, Norway. The inaugural five-year bond transaction was successful in raising approximately 5 million.

7 MARKET FOCUS LONDON The level of take-up in London remains behind that of its closest European neighbours at the mid-year point of 214 despite a noticeable rise in new enquiries. Total transactions for the year amount to 8.6MW, on par with the equivalent period in 213, although a little disappointing given the renewed interest evident this year. It is the improving economic environment which is encouraging corporate end users in particular to consider their future IT needs. Recent results from the IMF suggesting that the UK economy is currently growing faster than any other of the G7 states. Against this backdrop a restoration in corporate confidence is gathering pace and this is fuelling an upturn in data centre requirements both from end users themselves and also from potential partnering organisations such as cloud service providers. However most of the completed transactions in London this year have fallen below the 5kW mark and this has resulted in the lower amount of take-up. One specific topic that may have significant influence on take-up levels moving forward is that of customer churn. Telecity highlighted in their recent results a rise in recorded churn rates in part attributed to the closure of Prospect House but also because of underutilisation of space from some customers. The latter, in our opinion, could become more prevalent moving forward as London's enterprise customers with excess space look to downsize their footprint. Those customers with an imminent lease event will also seek to benefit from the competitive pricing environment where the delta between prices paid on an maturing indexed contract and new business contract pricing has grown in the past months. These two factors combined may encourage some customers who have locational flexibility to consider a move in order to obtain the best possible solution at the lowest price. Should customer churn rates begin to rise this will impact the supply of new space. As at Q2 214, total supply stood at 326MW with 75MW currently available. The result of customer downsizing and relocation could be a slower rate of new supply as operators look to refill vacated space before investing further in new inventory. Q2 214 European Data Centres MarketView FRANKFURT 7 Demand for data centre space in Frankfurt has exceeded that of the other major markets this year with the total of new customer contracts close to that secured in all of 213. Take-up for the first half of 214 amounted to 13.2MW just short of last year's total of 14.7MW but well ahead of the 5.6MW contracted in H The strength in the data centre market has come at a time when the German economy is beginning to falter. The federal statistics office in Germany recently reported an economic contraction of minus.2% in the second quarter. The result of this in future could be to derail potential new requirements from some prospective customers, particularly enterprises although there is little sign of this at present. Furthermore, any impact of enterprise business confidence loss is likely to be minimal to demand at least for the shorter term. Similar to Amsterdam, the majority of new contracts and requirements can be attributed to global technology companies, content providers and cloud infrastructure companies. More than 5% of identified take-up this year has derived from customers who fall under one of these segments with new capacity being secured to accommodate new product development and the expectant increase in enterprise demand for cloud services in particular. The heightened demand this year has meant that availability of customerready space has been reducing. At the close of the second quarter approximately 22MW of customer power was available although not all of that capacity has space fitted out. For some operators strong customer interest has brought about a revision to expansion plans. Interxion announced in April of their intention to accelerate the construction of FRA8 which will add 6MW customer power when completed in 215. Similarly e-shelter continues to make progress with construction of their second building at the Russelsheim campus. Completion of this phase is expected in early

8 Q2 214 European Data Centres MarketView MARKET FOCUS PARIS Data centre letting activity remains relatively subdued in Paris with the dominant enterprise sector remaining overly cautious when considering longer term spending commitments. Take-up for the first half of this year stands at 4MW, slightly less than the 4.4MW achieved in the same period of 213, and the lowest of the major markets. Business confidence and therefore growth in demand continues to be undermined by a weak national economy. The latest figures from INSEE indicate a second successive quarterly GDP growth rate of zero percent in 214. This is currently serving to discourage most end user organisations from committing to all but essential spending activity. Comparison can be drawn with London in that in anticipation of an upsurge in corporate outsourcing cloud providers are beginning to take additional space. During Q2 Interoute became the latest example of service provider expansion adding 4 sq m to their Paris data centre. With Paris retaining one of Europe's highest concentrations of global enterprise occupiers it is our opinion that cloud service providers will increasingly factor in future demand. At present though the slower rate of overall demand has meant that there has been little movement in supply this year. Total supply amounts to 12MW with 18MW currently available although when considered in conjunction with power assigned to unbuilt phases of data centres availability is much higher. This imbalance in supply and demand has led to pricing in the Paris market becoming particularly competitive in recent months. AMSTERDAM In Amsterdam the amount of power reserved in new customer contracts awarded this year has now passed the level achieved in all of 213. At the midpoint of 214 total transactions amounted to 11.7MW; this compares to the 11.3MW sold in total last year. Connectivity-driven demand continues to dominate the European data centre landscape seeing cloud, telecom and content providers particularly active. This type of customer is drawn to network-rich Amsterdam with access to the AMS-IX network having significant importance to growth and delivery of services. Typically the larger contracts tendered in Amsterdam derived from one of these sectors with the contribution to take-up in the last 18 months close to 5%. Strong demand continues to provoke a positive response from colocation operators with regard to new investment. During the second quarter Telecity announced that the final 5MW of capacity has been opened at their AMS 5 facility. This followed the announcement from Interxion in April to speed up the delivery of new capacity at their AMS7 data centre with a decision also made to increase the amount of available customer power to 15MW. Total supply at the end of Q2 had risen to 134MW of customer power with 25MW currently available. The supply total represents an annual growth rate over the past five years of 21% pa, close to double that of any of major European market. Both Equinix and Interxion are scheduled to bring further capacity on before the year closes. Interxion will complete the next phase of AMS 7 in Q3 214 and the second phase of Equinix AMS3 is due for completion in Q4 adding capacity for 1,8 cabinets. MADRID 8 A steady improvement to the Spanish economy in H1 214 has begun to form a foundation for data centre demand growth in Madrid but as yet has not proved to be the catalyst. According to the National Statistics Institute, the country's GDP grew by.4% in the first quarter, the highest rate in six years, followed by.6% in Q2, making Spain one of the strongest performers in the Eurozone. Despite these positive indicators business confidence has remained fragile. The latest index results from the Ministry of Trade in Spain show this to be in negative territory currently (-6). The consequence of this is that enterprises remain reluctant to commit to undertakings which involve significant change and investment such as data centre outsourcing, and are electing to hold firm current positions. The scale of data centre capacity transacted in H1 214 reflects the enterprise apathy. A total of 49kW had been contracted by the mid-point of the year. This total is 4% less than in the equivalent period of 213 although is only slightly short of the longer term average of 52kW for the period. Looking ahead latent enterprise demand can be expected to begin to filter through to the colocation market should economic stability be maintained. Current enterprise IT strategy is positioned toward engagement with an outsourced partner, increasingly involving cloud. This should benefit colocation providers moving forward both through an upturn in direct demand from enterprises and through growth in business from cloud service providers.

9 KEY STATISTICS EUROPEAN TIER 1 LOCATION SUPPLY MW AVAILABILITY MW COLOCATION TAKE- UP QUARTERLY COLOCATION TAKE- UP YEAR TO DATE London Q Q Frankfurt Q Q Paris Q Q Amsterdam Q Q Madrid Q Q European Tier 1 Total Q Q Q2 214 European Data Centres MarketView EUROPEAN MARKET ACTIVITY LOCATION QUARTER London Frankfurt Paris Amsterdam Madrid Colt has added 1, sq m of data halls to its London 3 data centre, located in Welwyn Garden City, bringing the total space available within the facility to 6,5 sq m. US fibre company Zayo Group has announced it has acquired Geo Networks Ltd, a London-based dark fibre provider. The acquisition will add over 2,1 route miles to Zayo's European network, and connectivity to 587 on-net buildings Pulsant completed the latest set of upgrades its Croydon, South London data centre facility. The upgrades are the next phase in an 18 million investment programme. Interxion has bought forward its expansion plans on the two phases of its FRA 8 facility, with the two remaining phases expected to provide a total of approximately 1,8 sq m. Kroll Ontrack, a global provider of ediscovery and data recovery products and services, has opened its new data centre in Frankfurt. In Hamburg, Colt has expanded its existing data centre in the city by adding 565 sq m. US fibre company Zayo Group acquired Neo Telecoms, a Paris-based bandwidth infrastructure company. The acquisition adds 35 metro route miles in Paris and more than 5 on-net buildings to Zayo's network. BT has taken space in the recently opened Equinix facility (PA4), expanding their data centre capacity in France The French datacentre group, CHOREUS Datacenter has started construction of its new Paris area facility which it is claimed will be the first such facility to be powered by trigeneration gas. Interxion has bought forward its expansion plans its AMS 7 facility by starting work on two further phases totalling approximately 2,6 sq m of equipped space and approximately 6 MW of power. Perigon Networks has added a new data centre in Amsterdam. The city of Amsterdam chose KPN to provide colocation services for its infrastructure in its Almere data centre Telefonica's Alcalá data centre located just outside Madrid and being built in phases - has become Europe's largest data centre and has obtained TIER IV Gold certification. 9 9

10 Q2 214 European Data Centres MarketView MARKET FOCUS COLOCATION SUPPLY WATCH London Q2 Contracted Available Frankfurt Q2 Contracted Available Paris Amsterdam Q2 Contracted Available Q2 Contracted Available Madrid 25 2 Key Contracted (MW) Available (MW) Q2 Contracted Available 1

11 DEFINITIONS COLOCATION TIER 1 MARKETS Amsterdam, Frankfurt, London, Madrid, Paris SUPPLY Retail colocation supply comprises of fitted data centre space only; unbuilt shell phases of the data centre are excluded. 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 Retail availability of space is based on fully fitted space vacant and available to sell Wholesale availability is based on all vacant space. VACANCY RATE The vacancy rate is a product of availability/total supply. Q2 214 European Data Centres MarketView 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 Q2 214 European Data Centres MarketView CONTACTS Andrew Jay Head of Data Centre Solutions Global Corporate Services CBRE 1 Paternoster Row London EC4M 7HP t: +44 () e: andrew.jay@cbre.com DATA SOURCE Martin Carroll Senior 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 CENTRE SOLUTIONS 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 CBRE Data Centre Solutions 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.