European Data Centres MarketView

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1 European Data Centres MarketView 213 CBRE Global Corporate Services SUPPLY +5.1% y-o-y Sep 13 AVAILABILITY -5.2% y-o-y Sep 13 VACANCY RATE -1.6% y-o-y Sep 13 COLOCATION TAKE-UP -17.3% y-o-y Sep 13 LONDON & FRANKFURT LEAD RETAIL DEMAND RISE IN 1 Quick stats AS AT QUARTER Supply Availability Headlines quarterly take-up 51% higher than 212 London take-up in highest of the major markets Frankfurt take-up 24% higher than at 212 Retail take-up in London double last year Cloud continues to drive new demand Vacancy dips as supply growth slows following last year s record increase In this issue Executive Summary Supply & Availability Take-up & Demand Market Focus London Market Focus Frankfurt Market Focus Paris Market Focus Amsterdam Market Focus Madrid Key Statistics Definitions 672,219 sq m 97,479 sq m Vacancy rate 14.5% Colocation take-up quarterly Colocation take-up annual YTD 8,9 sq m 23,185 sq m EXECUTIVE SUMMARY Mixed economic news does not appear to have slowed the rate of new market enquiries in the third quarter with several major markets now seeing earlier interest translate into completed transactions. Positive economic indicators from the UK are beginning to strengthen business confidence of London based end users, with the result being greater appetite to pursue IT investment. Whilst the economic outlook remains unsettled for the Eurozone, major connectivity hubs such as Frankfurt and Amsterdam continue to see sustained demand. Strong interest in deployment by cloud providers continues to feature on demand schedules as take-up in the third quarter increased. Total colocation take-up rose to 8,9 sq m (13MW) following a slower second quarter, a total which is 51% higher than in last year. Operators in London and Frankfurt above all are benefitting from an upturn in new enquiries with a rise in take-up indicating that new interest is now filtering through to secured contracts. A yearon-year comparison with 212 reveals that colocation take-up in Frankfurt is now 24% ahead of the equivalent period last year with connectivity-led demand continuing to drive the market. Accounting for 45% of colocation take-up in and 38% for the year to date, London is the leading major market in terms of transacted space and power this year. Demand for data centre services at London's retail providers in particular has been strong in 213 with total colocation take-up almost double that of 212. Vacancy levels have dipped further across the major markets in the third quarter as the rate of new supply brought to market this year continues to be slow. As at Frankfurt and Paris retained the lowest levels of vacancy at 12.14% with overall vacancy for the major markets dipping to 14.5%, the lowest point since Q Record growth in new supply last year has meant that for the most part operators are able to consolidate their positions in the major markets and turn attention to emerging markets and geographical spread. The next months should see this trend continue, re-establishing greater market balance in some areas. EUROPEAN TIER 1 COLOCATION MARKET AS AT 213 8, 7, 6, 5, 4, 3, 2, 1, Supply (Sq M) LHS Take-up (Sq M) RHS 213 8, 7, 6, 5, 4, 3, 2, 1,

2 213 European Data Centres MarketView SUPPLY & AVAILABILITY COLOCATION MARKET HIGHLIGHTS The level of vacant space across the major markets in Europe continued on a gradual downward trajectory during the third quarter following the trend of reduced new build activity started at the beginning of the year. The industry consensus for 213 was for a significant slowdown of new build programs in the major markets. Record activity in 212 has enabled operators to consolidate their positions and concentrate on emerging markets and expansion of geographical coverage. Steady decline of overall vacancy rate in Europe highlights this shift in focus where the current rate of 14.5% reflects the lowest point in 15 months. Of the major markets, London presently maintains the highest level of vacancy at 17.7%, this is largely due to the presence of a significant wholesale offering in the city. One significant supply announcement in the third quarter details Equinix's intention to build a sixth data centre in London with initial indications of 215 for the opening of the first phase. In Frankfurt, another pan European operator, Interxion, announced their intention to bring forward plans for their ninth data centre in the city. Fresh from announcing the construction commencement of FRA8, FRA9 will open in early 214 bringing 8 sq m of newly equipped space to market. As at, Frankfurt (jointly with Paris) has the lowest level of vacant space of the major markets at 12.14% with stronger demand expected to further reduce availability before year-end. Digital Realty's acquisition of a 5.4- acre site in Amsterdam with plans to construct a 15,9 sq m (11.5MW) data centre was announced in the third quarter marking the entry of a significant new wholesale presence to the market. Strong demand in the past 2-3 years has encouraged rapid growth in the Dutch capital with total supply rising by 26% during this time. Supply and vacancy in both Paris and Madrid have remained at stable levels. Weaker demand in these cities coupled with significant new space entering the market last year and early in 213, has meant that emerging new requirements are able to be satisfied through existing space. A forward view of supply characteristics in Europe's major markets points to slower supply growth for the next months. Realignment of market balance is now underway following last year's sharp rise in operator activity. New space will of course continue to be built out as demand dictates, but our view is that major new schemes will not begin to have a significant impact on levels of supply until 215. MARKET BALANCE RETURNING IN KEY MARKETS Charts 2 & 3: Historic Colocation Supply 2 Colocation Supply and Availability (Sq M) Colocation Supply Annual Increase (Sq M) 8, 7, 6, 5, 4, 3, 2, 1, Supply Availability m² (thousands) New Supply

3 SUPPLY & AVAILABILITY MARKET NEWS ROUNDUP The third quarter of the year again saw providers of retail colocation solutions announce new data centre openings or expansion programmes at existing facilities across many of the key European locations. For example, in the UK, NTT subsidiary, Gyron Internet, reported that it will start construction of a new data centre that will provide around 1, sq m of server room from spring 215, located on a 9.5 acre site near its two existing data centres in Hemel Hempstead, Hertfordshire. Elsewhere in the UK, M247 opened its new 3 rack data centre in Manchester, whilst Volta Data Centres formally announced the opening of its 8,454 sq m Great Sutton Street facility in London. Elsewhere in Europe, Interxion reported new expansion projects in Stockholm, Vienna, and Zurich allocating a capital expenditure of approximately 11 million. In Stockholm, the company is building the second phase of its STO 2 facility to provide approximately 5 sq m, in Vienna, it has built the fourth phase of VIE 1 providing 4 sq m and in Zurich, it is building the fourth phase of ZUR 1 to provide a further 5 sq m of space. Other notable announcements during the quarter saw data centre operator, Dataplex, launch its 23 million data centre in west Dublin, Ireland, whilst colocation provider, TelecityGroup, announced the opening of its a new 5MW capacity facility in Hansa, Finland, and OVH, the French data centre operator, report the opening of its 35, server facility in Gravelines, Northern France. In the UK, the developer announced that it had submitted a planning application for the development of two data centres on the site of the former GlaxoSmithKline facility in Crawley. The two finished facilities are expected to deliver in excess of 23,225 sq m of space. Elsewhere in the UK, the third quarter also saw the launch of the new Gateway Data Centre site, located in West Thurrock, Essex. The 2.3 hectare site has planning permission for a 19,5 sq m gross floor area which will supply 8, sq m of data hall split over two floors. Supply activity amongst IT integrators, carriers and hosting companies continued during the third quarter. For example, IT integrator, IBM reported an US$8 million investment in a new cloud centre in Cerdanyola del Vallés, Barcelona, whilst hosting company Seeweb announced the opening of its new facility in central Italy. The facility, Roma Sud A, contains a 4,5 sq m data centre as well as 1,8 sq m of offices and technical rooms. Other transactions occurring in the third quarter of note included Microsoft securing planning consent for a new 38 million data centre in Dublin, the company's fourth in the city, which will extend over 13, sq m of data storage space, whilst Ericsson, the Swedish provider of communications technology and services, is planning to invest approximately 675 million to build three global ICT Centers, two of which will be located in Stockholm and Linköping, Sweden. 213 European Data Centres MarketView 3 Although reported development activity has remained relatively limited over the year particularly that of a speculative nature the third quarter saw a number of notable examples of wholesale data centre providers announce new supply plans across Europe. Data centre builder, DigiPlex announced the purchase of a 1 acre site outside of Stockholm containing a 12,785 sq m former factory building which, once retrofitted, will provide over 6, sq m of wholesale technical space. The site has additional planning approval to be further developed at a later date and once completed, could deliver around 2MW of power offering both retail and wholesale space. In addition, the company also reported a partnership to design, build and operate a new data centre in Fet, for the Norwegian IT company, EVRY. Global data centre REIT, Digital Realty continues to play a prominent role in European data centre supply activity. During the third quarter, the company announced a partnership with KPN to build a 3.5 MW, 7 sq m data centre in Groningen, The Netherlands, whilst elsewhere in country the company reported that it had bought a 5.37 acre site in Haarlemmermeer, a suburb of Amsterdam, where it intends to build a 15,9 sq m, 11.5 MW facility. Supply activity appeared to be particularly strong amongst the European telecommunication companies. For example, Portugal Telecom inaugurated the first tranche of its new 75, sq m data centre situated in the city of Covilha, Manx Telecom reported that work had started on its new Greenhill Data Centre on the Isle of Man Business Park, and in the Netherlands, Colt announced that it is expanding its carrier neutral facility in Roosendaal, with the creation of an additional 1, sq m of data centre capacity to provide 1.65MW of power, which follows an initial deployment of 3.3MW earlier this year. Elsewhere, Neo Telecoms opened its new 1, sq m facility in Paris and KPN reported the opening of a 1,9 sq m data centre in Rotterdam. One surprise during the quarter saw the reduction in possible development stock earmarked for data centre use in the UK. Having been granted approval in principle by the local authority in 21 Dumfries and Galloway Council have rejected an application by Scotia Global Limited for a three year extension on their data centre proposals at Johnstonebank Farm near Ecclefechan, Scotland. This was made even more surprising as just weeks later Dumfries and Galloway Council reportedly agreed to extend the planning consent of the neighbouring site of Peelhouses Farm, just north of Lockerbie. Scotia Global has subsequently submitted an appeal. 3

4 213 European Data Centres MarketView TAKE-UP & DEMAND COLOCATION MARKET HIGHLIGHTS The third quarter provided indication that, finally, strong early market interest appears to be turning into confirmed transactions with a steady increase in completed contracts reported. Total colocation take-up for the quarter rose to 8,9 sq m (12.6 MW) following a slower second quarter, a total which is 51% higher than in last year. The year-to-date take-up total remains behind that achieved at this point in 212 (-17%) although sustained strong market interest, evident in many of the markets, could reduce this deficit as operators and end users look to close of contracts by year end. Common across all of the markets are new requirements to support virtualisation and incorporation of cloud technology. Now considered the perfect tool to achieve efficiency gains, cloud deployment in particular is having the greatest impact on demand for data centre capacity as corporate end users build cloud usage into forward thinking IT strategy. The result of this is a fundamental shift in the characteristics of end users leading to a change in contract structure. Technology and cloud providers now make up an increasing share of new business brought to data centre operators often initiated by growth in new business from corporate end users. Negotiated contract structures with typical data centre providers from these end users often include provision of option space, meaning day one requirements are smaller but with greater long-term growth potential. The Frankfurt market in particular is benefitting from an increase in cloud deployment helping total take-up to rise to 7,75 sq m so far this year. This total represents a 24% year-onyear improvement. Frankfurt's position as a major connectivity point for Europe continues to be a major draw to the city, attracting a wide range of data centre users particularly the most active sectors such as technology, cloud, telecoms and digital media. Equally, demand continued to show further improvement in London in the third quarter following a slow first half of the year. Of the major markets, London has now achieved the highest level of take-up this year with transacted space reaching 8,795 sq m. London's retail providers in particular are experiencing a busy period with total take-up in this sector almost double that of last year. The third quarter also recorded an encouraging rise in transaction activity in Amsterdam. The continuing strong interest in the market is yet to be fully reflected in total take-up. It will be interesting to see the scale of new contracts agreed in the final quarter. The Paris and Madrid markets remain relatively subdued. End user confidence continues to restrict the frequency and scale of new requirements brought to market. Gradual improvement to business sentiment should provide a platform for a rise in interest moving forward. Charts 4 & 5: Historic Take-up Analysis 4 Total Take-up by Market Sector (Sq M) Colocation Take-up by Location (Sq M) 12, 1, 8, 7, 6, 8, 5, 6, 4, 4, 3, 2, 2, 1, retail colo wholesale colo London Amsterdam Frankfurt self build threat stock Paris Madrid

5 TAKE-UP & DEMAND MARKET NEWS ROUNDUP During the third quarter of 213, reported take-up of data centre space has remained buoyant, with strong demand driven by corporate requirements either directly or through the third party IT outsourcing channel. Indeed, the willingness of corporates to rely on specialist providers to run their IT real estate continues to underpin the development of the European data centre market. One of the more notable transactions witnessed in the quarter saw Crédit Agricole, the largest retail banking group in France, sign a sale and leaseback agreement on its Trappes data centre with French hosting provider Energy4data as part of its on-going strategy to consolidate and rationalise its portfolio of data centres. In addition, Dataport awarded the contract for support of its IT operations including data centre operations to Computacenter in Germany, whilst Balfour Beatty has reportedly asked Fujitsu to help create a standardised IT infrastructure for its UK business, where Fujitsu will host and manage the company's data in a shared storage environment, using both physical and cloud-based virtual data centres. Retail colocation providers have benefited from the continued demand for ready-to-market product, potentially enhanced by multi-site or multi-country requirements seeking providers with a solid European footprint. For example, Interxion announced that Deluxe Entertainment Services Group, a provider of entertainment industry services and technologies, has deployed its cloud-based broadcast services platform within Interxion's London and Amsterdam data centres, and Node4 provided a private cloud-based solution to Motorpoint, running from its data centres in Northampton and Derby. Elsewhere in the UK, Level 3 is set to provide Hexcel Corporation with colocation services from its data centre in Hayes, West London and the fluid sealing product manufacturing specialist James Walker extended its IT contract with Easynet Global Services. 213 European Data Centres MarketView One other transaction to note successfully illustrates the drivers of outsourcing the IT infrastructure function. Manchester-based IT infrastructure specialist ANS Group had previously announced the building of an 8 million 1,86 sq m data centre facility at The Sharp Project, Manchester. Most recently, the company has reported that it has decided not to pursue this avenue as it would have been too capital intensive and it will now expand by utilising third party data centre providers. To this end, the company has announced that has signed a data centre and network services deal with Manchester data centre operator M247. Of course, the reach of the third-party outsourcing environment is deeper than just the real estate environment, with many corporates relying on providers to run their entire IT functions. For instance, IBM announced a multi-billion dollar, 1-year agreement to transform the IT infrastructure that supports UniCredit's commercial and private banking activities in Italy, Germany, Austria, Slovakia, and the Czech Republic, and another 2 million, 1-year contract with Spanish bank, Kutxabank to take-over the running of its IT infrastructure. 5 Other transactions of this type saw HP report its agreement to supply IT outsourcing services to the Swiss-based industrial component supplier Datwyler Group, Atos announce the signing of an outsourcing contract with Belgian energy company EDF Luminus, and global mining company Anglo American signed a deal with HCL to deliver IT services across the globe. 5

6 213 European Data Centres MarketView TAKE-UP & DEMAND INVESTMENT AND OUTLOOK Investment The third quarter of 213 has seen little published evidence of direct real estate investment activity, although it is noted that the nature of the business of data centres has meant that commonly there is a much greater degree of confidentially surrounding transactions of this type than is the case in the wider traditional real estate markets. The third quarter did, however, provide some further evidence that the sector is experiencing continued buoyant merger and acquisition activity, as companies seek to benefit from strategic advantage by acquiring cross-selling opportunities amongst the different areas of IT infrastructure. In the UK, for example, data centre company iomart Group completed the acquisition of Redstation, a provider of managed services, for a maximum consideration of 8 million and followed with the acquisition of Backup Technology, a Leeds based provider of cloud backup and disaster recovery services for a reported 23 million. Forecast With current forecasts for economic growth across Europe more positive in sentiment than has been the case for a number of years, allied to the fact that the data centre industry has proved to be relatively robust during the period, sentiment over prospects for the industry moving forward look generally positive. Indeed, for both retail and wholesale providers, a report from Synergy Research Group suggests continued strong growth, with total colocation revenues globally forecast to reach US$3 billion by 217. Outsourcing of IT infrastructure to third party providers continues to grow as a popular option for the corporate sector. Drivers for this are many, although according to a recent report by Vanson Bourne, third party service provision is an attractive option because businesses are being restricted by their reliance on internal IT infrastructures, with on-site data centres often proving to be very expensive to maintain and update. Other transactions have seen Host Europe Group report its acquisition by European private equity firm, Cinven, from Montagu Private Equity whilst UKFast has completed its acquisition of US hosting company BurstNET and the UK managed IT services provider, hso announced the purchase of network and hosing provider, Goscomb Technologies, for an undisclosed sum. In other parts of Europe, Irish managed solutions provider Digiweb acquired the retail assets of Mondial Telecom, a Belgian internet service provider, for an undisclosed sum, whilst Spanish web hosting company Arsys reported that it had agreed to be acquired by 1&1 Internet. In terms of capital-raising activity, the third quarter saw UK data centre operator Infinity SDC announce it has secured 48 million of funding from existing and new investors including US based Caxton Alternative Management LP and Wood Creek Capital Management. Meanwhile, in Russia, a consortium comprised of the Russian Direct Investment Fund, the European Bank for Reconstruction and Development and the CapMan Russia II fund, has completed an investment in Russian IT company, Maykor. The three partners will invest up to US$1 million in Maykor that will allow the group to grow its market share and support Maykor's growth strategy inside Russia. Many industry sources and research reports point towards a substantial increase in spending in overall IT outsourcing and in particular cloud computing over the coming years. A recent survey of more than 23 of highest spending UK businesses on IT by Whitelane Research revealed that more than a third of those businesses are planning to increase the amount of IT outsourcing. Indeed, research group IDC projects worldwide spending on public IT cloud services will reach US$47.4 billion in 213 and is expected to be more than US$17 billion in 217. So whilst some corporates will continue to want to run their IT estates internally and indeed see this as potentially their unique strategic advantage to their competitors the proliferation of IT outsourcing, whether it is simply the infrastructure or applications that run over the infrastructure as well, is set to continue to significantly affect the take-up of data centre space within Europe. 6

7 MARKET FOCUS LONDON Demand for data centre services in London continues to show further improvement in the third quarter after mixed economic news had unsettled occupier sentiment at the beginning of the year. A succession of positive growth indications in H2 have begun to instil business confidence with the governor of the Bank of England, Mark Carney in the last few weeks confirming that recovery in Britain has finally taken hold. The renewal of an optimistic business approach is certainly being recognised by London's data centre operators where new interest for services is filtering through. The market for retail colocation services has experienced a rising flow of new enquiries and transactions as the year has progressed. Total take-up in this sector is now almost double that of 212 total at 6,135 sq m (1MW) and currently accounts for 7% of take-up in the capital this year. Contrasting the experiences of last year, larger requirements, 75kW and over, have been few in number and this has reduced the level of completed wholesale transactions. 212 began with several large contract awards at wholesale facilities with Tesco/Sentrum and Cable & Wireless/Infinity providing good examples of this. Currently total take-up in this sector is well short of the preceding year at 2,66 sq m (4.9MW) although the past two quarters have given indication of a return to market for this type of requirement. At present we are aware of several significant contracts in the closing stages of negotiation, perhaps as much as 15MW, could complete. This coupled with recent awards such as Source at Ark suggests that wholesale take-up could look healthier by year-end. Turning to supply, both London's retail and wholesale providers were particularly active in 212 in bringing new space to market and although new space continues to be released, additions to supply have been less frequent in 213. So far this year a further 8,1 sq m of sale-ready capacity has been added compared with 27, sq m last year. Despite new schemes such as Equinix LD6 and Virtus Hayes being announced in, the slower rate of new supply is set to continue through 214 and into 215. The market effect of this will be to reduce the level of available vacant space, currently the highest of the major markets, and return the market to a state of equilibrium. 213 European Data Centres MarketView FRANKFURT The Frankfurt data centre market continues to see strong growth in demand as 213 progresses with takeup in the third quarter rising sharply following a slower Q2. A year on year comparison highlights a 24% rise in contracted space compared to the equivalent period in 212 as total take-up reached 7,75 sq m at the end of Quarter 3. Buoyed by the stability of the German economy and the improving prospects of trading partners, major corporates, particularly financial companies, have re-emerged as potential sources of new demand. However, the evolving nature of IT deployment has led to the service of new IT requirements through multiple channels, with cloud now an integral part of modern IT strategy. As at however Frankfurt has the joint lowest level of vacancy of the major markets at 12.14% and we expect further announcements of new space should demand growth continue on its current upward path. 7 Despite the higher power cost in Germany, connectivity-led demand is continuing to source Frankfurt as the location of choice. Cloud take-up in particular remains the driving force for the majority of new requirements with the importance of ease of access to multiple networks paramount to business operations of service providers. Equally important is close proximity to a strong customer base where Frankfurt's large financial services community is particularly attractive. The sustained level of market demand has brought a positive new supply announcement in the third quarter with Interxion unveiling plans for their ninth data centre in the city. The new facility will add 8 sq m to Interxion's strong presence in Frankfurt with opening of the new space preceding the already announced FRA8 in early 214. In recent years, Frankfurt has seen data centre supply grow at pedestrian pace following a period of over-supply and weakened demand. 7

8 213 European Data Centres MarketView MARKET FOCUS PARIS The third quarter has produced little in the way of market improvement in Paris with sluggish demand a continuing consequence of weakened business confidence. The decision by Standard and Poor's to further downgrade the French credit rating in has served only to exacerbate the situation thus confirming business growth anxiety and subsequently weaken appetite for outward IT investment. At, total take-up for the year reached 3,12 sq m (4.8MW), around a third less than in 212 although the delivery of staggered option space flattered the total last year. The Paris market is particularly susceptible to the changing moods of business where demand for data centre services has a high dependency on locally derived corporate requirements in contrast to other major data centre hubs. A cautious business community has resulted in infrequent demand with new and ongoing requirements seemingly long-drawn-out in contractual process. Although demand remains subdued, the overall availability remains low. The current vacancy rate for the city is 12.14%, joint lowest of the major data centre locations with Frankfurt. For the immediate future significant delivery of new space is not scheduled, therefore ensuring a level of market balance.. AMSTERDAM The high level of market enquiries finally appears to be translating into transacted business in Amsterdam with data centre take-up showing a steady increase in the third quarter. Total take-up for the quarter was 1,47 sq m (2.7 MW) bringing the yearly total to 3,495 sq m (5.9 MW). At this level, this is just short of the equivalent period last year, although the final quarter of 212 saw conclusion to two large transactions resulting in record take-up. A repeat of this is unlikely although we expect take-up to better reflect the strong market interest by year-end. Demand continues to be driven by international technology and telecom companies with high quality connectivity at the forefront of their wish lists. The telecoms, media & technology (TMT) sector continues to be the most active source of demand across the European markets with Frankfurt and Amsterdam, recognised connectivity hubs, benefitting mostly. The market continues to react to sustainable demand with the third quarter announcement of Digital Realty's acquisition of a site at Hoofddorp. Amsterdam is currently the fastest growing of the major markets with supply having risen by 26% to 96,16 sq m (119MW) since the beginning of 212. All major data centre operators have now either brought new space to market or announced their intention to do so in the past months. This latest example of a major expansion by a leading operator adds a wholesale dimension to this rapidly growing market and confirms operator confidence in sustained demand growth. MADRID 8 The colocation market in Madrid continues to struggle amidst subdued business confidence and resistance toward outsourced IT solutions. The third quarter has brought some positive news with regard to the economic growth although examples of this filtering through to the data centre market are still limited. There has been little new take-up during the quarter but reflection on the annual total reveals an improvement on last year. Total take-up for the year stands at 7 sq m (1MW) a low total by comparison to the other major markets but a 32% improvement compared to the equivalent period in 212. Aside from the weakened economic environment, the resistance to embrace colocation partners into IT strategy is a limiting factor to colocation demand. Typically, system integrator services are procured in conjunction with colocation providers when outsourced solutions are being deployed, however the market norm remains to retain IT functions in house. This trend looks unlikely to change in the immediate future, however the potential for market growth remains. Similar to other major capital cities, Madrid's large corporate community could provide a stable source of new requirements should a change in strategy occur. Budgetary pressure and obsolescence are areas that may ignite a change of attitude longer term.

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 ,953 5, % 3,655 8, ,369 51, % 1,76 12,35 Frankfurt ,512 19, 12.14% 2,215 7, ,658 24, % 1,61 5,72 Paris ,674 12, % 63 3, ,51 14, % 845 5,54 Amsterdam ,16 14, % 1,47 3, ,517 11, % 1,125 3,93 Madrid ,64 1,76 3.7% , % 53 European Tier 1 Total ,219 97, % 8,9 23, ,656 12, % 5,34 28, European Data Centres MarketView EUROPEAN MARKET ACTIVITY LOCATION QUARTER London Frankfurt Paris Amsterdam Madrid Digital Realty has submitted a planning application for the development of two data centres on the site of the former GlaxoSmithKline facility in Crawley. In all, the two data centres total in excess of 23,225 sq m. Volta Data Centres formally opened its 8,454 sq m of Great Sutton Street data centre in the City of London. Gyron Internet will start construction of a new data centre in Hemel Hempstead to provide approximately 1, sq m of server room from spring 215. QuickPlay Media, a provider of cloud-based managed service has announced the launch of its first European data centre in Frankfurt. Global Switch is planning further data centre on land it already owns on its existing campuses in Frankfurt. Atos announced a contract renewal to provide IT services for the German mobile group E-Plus. The French infrastructure operator Neo Telecoms has opened its new 1, sq m data centre facility in Paris. SAB, a banking and financial software vendor, has moved the core IT infrastructure to two of TelecityGroup's data centres located in the Paris region. Outside Paris, OVH has opened a new a data centre in in Gravelines. Digital Realty has bought a 5.37 acre site in Haarlemmermeer, a suburb of Amsterdam, to build a 15,9 sq m, 11.5 megawatt data centre. The international streaming provider Securenet Systems has opened its fourth data centre location in Amsterdam. Interxion is hosting Deluxe Entertainment Services' platform in its London and Amsterdam data centres. Huawei and Phoenix NAP have selected Evoswitch to supply data centre services Interxion has announced that its MAD2 data centre has achieved LEED Gold certification, the only Spanish data centre to do so. Outside Madrid, IBM has announced an US$8 million investment in a new cloud centre in Cerdanyola del Vallés, Barcelona. IBM has signed a strategic outsourcing agreement with Spanish banking group, Kutxabank to develop the bank's IT infrastructure. 9 9

10 213 European Data Centres MarketView MARKET FOCUS COLOCATION SUPPLY WATCH London 3, 25, 2, 15, 1, 5, % 18% 16% 14% 12% 1% 8% 6% 4% 2% % Frankfurt 18, 16, 14, 12, 1, 8, 6, 4, 2, % 2% 15% 1% 5% % Paris Amsterdam 12, 1, 8, 6, 4, 2, % 12% 1% 8% 6% 4% 2% % 12, 1, 8, 6, 4, 2, % 2% 15% 1% 5% % Madrid Key 35, 3, 25, 2, 15, 1, 5, % 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. 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

12 213 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.