European Data Centres MarketView

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1 25 Q1 26 Q1 27 Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 European Data Centres MarketView Q1 214 CBRE Global Corporate Services SUPPLY +5.6% y-o-y Mar 14 AVAILABILITY +3.1% y-o-y Mar 14 VACANCY RATE -.37% y-o-y Mar 14 COLOCATION TAKE-UP +9.% y-o-y Mar 14 STRONGEST Q1 IN SIX YEARS FOR EUROPEAN DATA CENTRES 1 Quick stats AS AT QUARTER Supply Availability Headlines Total colocation take-up close to double Q1 213 total. Highest quarterly take-up in Frankfurt since 29 accounts for 39% of Europe s total. Take-up in Amsterdam 4 times higher than in Q Availability hits 1 year high. In this issue Executive Summary Supply & Availability Take-up & Demand Market Focus London Frankfurt Paris Amsterdam Madrid Key Statistics Definitions 697,994 sq m 14,335 sq m Vacancy rate 14.95% Colocation take-up quarterly Colocation take-up annual YTD 16,712 sq m 16,712 sq m EXECUTIVE SUMMARY Data centre operators continue to reap the rewards of a stabilising business environment with transaction activity in the first three months of the year amounting to the best Q1 since 28. Colocation take-up during the first quarter was 16,712 sq m, slightly less than achieved in Q4 213 but 9% higher than the same period in 213. Although some larger transactions were concluded in the quarter, predominant requirement sizes remain below 5kW with option space increasingly being specified to allow for growth. The principal source of the larger transactions continues to be the IT infrastructure companies who have become an integral part of the modern data centre community. Alongside Amsterdam, the major business centres of London and Frankfurt remain a particular target for this type of occupier. The high concentration of corporate occupiers in these cities potentially offering extensive amounts of future custom as hybrid cloud migration gathers pace. In the first quarter Frankfurt enjoyed a particularly successful period of letting activity recording the highest quarterly total for take-up since 29 and accounting for 39% of the European total. Amsterdam also continues to benefit from growth in connectivity-led requirements. Take-up during the quarter was the second highest of the major markets and four times higher than that achieved in Q Market activity in Europe's largest market, London, was in line with the five-year average albeit two transactions of over 1MW accounted for two thirds of the quarterly total. The upturn in demand has in some cases prompted a revision to operator expansion strategy with the release of new space being accelerated to accommodate potential customer requirements. This has been particularly true in markets such as Frankfurt where at the close of 213 available supply had reduced to a historic low rate of 9.95%. Despite the high level of contract awards in Q1 214, the combined effect of expansion activity and some recent customer churn has meant that total availability in Europe has risen to 14,355 sq m, a 1-year high. EUROPEAN TIER 1 COLOCATION MARKET AS AT Q , 7, 6, 5, 4, 3, 2, 1, 2, 17,5 15, 12,5 1, 7,5 5, 2,5 Supply (Sq M) LHS Take-up (Sq M) RHS

2 Q1 214 European Data Centres MarketView SUPPLY & AVAILABILITY COLOCATION MARKET HIGHLIGHTS Expansions accelerate in key locations Following last year's steady decline in availability a sharp uplift in space released to the market in the first quarter has resulted in the level of available space reaching a 1-year high. The total amount of supply vacant at the end of Q1 was 14,355 sq m, an increase of 14, sq m on the quarter which represents the largest single rise in 18 months. This uplift was not wholly unforeseen with the operator expansion schedules known for many months. A gradual increase in availability for this year was highlighted in our Q2 213 viewpoint although the rise this quarter has been higher than expected. The higher current level of available space however is likely to be short lived. The reason for this spike in availability is a combination of completion of planned expansion projects, customer churn and adjustment to future build programs. Schedules of work on future phases of schemes have been brought forward to accommodate stronger than expected customer interest, Interxion being the latest example of this project realignment. Much of this new space though is likely to be under final negotiations with customers and therefore the shelf life likely to be limited. As at Q1 the highest level of vacancy remains in London with 52,83 sq m currently available. This total is largely due to the presence of a significant wholesale offering in the city although the recent completions by retail operators have contributed to a rise. The level of vacant retail space in the city has now reached 8.4%, the highest rate of vacancy since 25, with the completion of the final phase at Equinix's LD5 and new customer space added at Telehouse West contributing to this increase. In the first quarter the strongest demand has been in Frankfurt which has ensured that the level of vacant supply has remained relatively low. Vacancy rates in the city fell to an unprecedented level at the end of last year, 9.95%, rising to 13.77% in the first quarter. Completions at Equinix and Interxion have been mostly responsible for the small increase in Q1. A steady pipeline of new supply is scheduled for later this year and into 215 although rises to vacancy rates are expected to be minimal. The Paris market currently has the lowest vacancy rate of the major markets at 12.49%. Significant letting activity at the end of last year depleted the level of supply available in the market although when shell space is considered, Paris retains significant amounts of capacity to accommodate future demand for some time to come. Finally, Amsterdam remains a particular target for operator expansion. Both Telecity and Interxion have added to their capacity in the city with the opening of Interxion AMS7 and expansion at Telecity AMS 5. Growth in market supply has outpaced all the major European markets at a rate of 12.9% per year over the past 5 years. Strong demand during this time has restricted large rises in availability with vacant supply amounting to 15,458 sq m at the end of Q1. 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, Q1 Let Supply Vacant YTD 214 New Supply

3 SUPPLY & AVAILABILITY MARKET NEWS ROUNDUP The first quarter of 214 saw a continuation of the positive markers that have been tracked through the previous 12 months. Whilst developing troubles in the Ukraine may raise concerns that the recovery rate of the European economy could face fresh challenges, indications are that the underlying confidence in economic growth is generally strengthening and prospects for the data centre industry strengthen with it. During this first quarter, retail colocation providers have continued to announce a series of new facility openings or expansion programmes. For instance, Interxion reported new facilities in both Austria and Sweden. The former will see some 5,5 sq m of equipped space in total, with the first phase of 6 sq m to be delivered in the final quarter of 214, whilst in Stockholm the company will construct its third data centre to provide approximately 1.5 MW of customer power. The company also completed expansions of facilities in Amsterdam, Brussels and Frankfurt during the first quarter. Elsewhere in Europe, French data centre provider, SFR has hired HP, Schneider Electric and Cap Ingelec to build a modular data centre in the Paris suburb of Trappes, whilst in Holland Juniper Networks added a further 1,5 sq m of capacity at the Schiphol-Rijk facility. Meanwhile, in London, Telehouse announced the opening of the final 1, sq m of colocation at the Telehouse West data centre, whilst in Surrey, Aegis Data unveiled its new data centre in Godalming and Equinix reported that it will build a new 8, sq m facility on its Slough campus. The first quarter of the year saw limited evidence of reported development activity but there were a number of examples of wholesale data centre providers announce new supply plans across Europe. For instance, in Norway Green Mountain Data Centre reportedly bought the building adjacent to its current data centre in Rjukan which it intends to demolish and replace with a new 1, sq m data centre. In Germany, e-shelter announced the start of work on the second phase of its proposed four phase Frankfurt 3 data centre in Rüsselsheim, to provide approximately 4,4 sq m of space. One other announcement during the quarter saw Scotia Global Limited abandon plans for a major data centre scheme in Scotland at Johnstonebank Farm near Ecclefechan, after a number of years of involvement including a protracted planning process. Supply activity amongst IT integrators, carriers and hosting companies continued apace during the first three months of the year. For example, amongst the major integrators, IBM announced plans to invest some US$1.2 billion to boost and expand its cloud footprint in the international market through a number of new data centres across the globe, including London. In Jersey, JT obtained planning consent to build a new 6 rack facility adjacent to an existing data centre in St Saviour; on the Isle of Man, Manx Telecom opened the first phase of its new Greenhill data centre and in Lille Lambeth, TDF reported the inauguration of its second data centre and BlackKnight Solutions opened the first phase of its new data centre in Ireland. In Europe, Interoute reported the opening of its new 4,5 sq m data centre in Madrid and added a new facility in Milan. In addition, Russian colocation provider, DataPro announced the opening of a new data centre in Moscow, set to be the company's flagship facility with around 7,5 sq m of technical space. Other integrator announcements saw CenturyLink Technology Solutions report further investment in its hosting capabilities with plans to expand its global data centre presence in eight markets during 214. Although largely focused on North America, the expansion programme included the company's facility at Reading, which is set to complete in the third quarter of this year. Q1 214 European Data Centres MarketView 3 In the UK, global data centre REIT, Digital Realty reportedly broke ground on a new 12,8 sq m facility for Rackspace in Crawley, West Sussex. The site which sits on a 15-acre campus will eventually comprise of four data suites with a total 1MW capacity. In addition, the London Legacy Development Corporation granted approval for redevelopment of the former Press and Broadcast Centres on Queen Elizabeth Olympic Park to icity. The scheme proposes over 1, sq m of space to include the Infinity Stratford data centre providing clients with 13, sq m of net technical space. 3

4 Q1 214 European Data Centres MarketView TAKE-UP & DEMAND COLOCATION MARKET HIGHLIGHTS Q1 letting activity highest since 28 Following the exceptionally strong end to 213 the first quarter results would always be seen as a gauge of the coming year with the biggest question being "how sustainable is the current upturn in demand? Last year certainly finished with a flourish recording the highest level of quarterly take-up since 28 in Q4. The steady improvement shown in business conditions served as a catalyst for the uptick, inspiring corporates to consider their future strategy and more notably encouraging service providers to secure data centre capacity to accommodate burgeoning corporate demand. The first quarter has not quite reached the same level as Q4 213, however we can report that the strong market interest appears to be holding firm. Total takeup in the first quarter was 16,712 sq m, a total that represents the highest Q1 amount since 28. The fact that we are seeing the best result since 28 is possibly hugely significant, with some industry reports suggesting a return of pre credit crisis levels of market interest. It is perhaps too early to confirm or dismiss this assertion however what is true is that today's market place is very different from 28. At the forefront of market demand are cloud service providers which are proving to be a particularly fruitful source of new business to data centre operators. This type of business has become an essential addition to an established data centre customer community. Their presence is serving to attract interest from a host of differing companies offering add-on services as well as major enterprise customers with cloud deployment aspirations. High on the agenda for cloud firms are the major business territories such as London and Frankfurt. These locations are of particular interest given the concentration of enterprise customers, a pool which promises to yield significant new business from enterprise migration to hybrid cloud. Amsterdam also remains an attractive market for service providers. Connectivity is a fundamental resource in servicing customer demand, particularly across borders, with Amsterdam viewed as the ideal location to position operations. Of these markets the first quarter has proved to be a particularly successful period for new lettings in Frankfurt with the highest quarterly total achieved since 29. Total take-up in Q1 was 6,57 sq m, the highest in the major markets. Amsterdam also enjoyed a strong beginning to the year with 4,786 sq m transacted, a total which is four times higher than that of Q The recent successes of Frankfurt, Amsterdam and London serve to highlight the current disparity developing among the major markets. Aside from cloud, connectivity remains at the heart of the majority of new requirements with those centres recognised as being connectivitysignificant receiving heightened interest. A contrasting situation exists in Paris and Madrid where demand, largely driven by localised corporate occupiers, is somewhat sporadic with market conditions remaining more challenging. Charts 4 & 5: Historic Take-up Analysis Total Take-up by Market Sector (Sq M) Colocation Take-up by Location (Sq M) 6, 6, 5, 5, 4, 4, 3, 3, 2, 2, 1, 1, YTD retail colo wholesale colo 214 self build threat stock YTD London Amsterdam 214 Frankfurt Paris Madrid

5 TAKE-UP & DEMAND MARKET NEWS ROUNDUP Reported take-up of data centre space during the first three months of 214 has remained buoyant, with strong demand driven by corporate requirements either directly or through the third party IT outsourcing channel. Indeed, corporate preferences for specialist providers to run their IT real estate continue to underpin the development of the European data centre market. There were a number of notable transactions witnessed over the first quarter. Baltic Data Center announced that it has signed a three year deal to provide IT infrastructure in Lithuania, Latvia and Estonia, to Danish banking group, DNB Bank; Atos signed a new 5-year global data centre transformation contract with Huntsman; German ICT provider QSC secured a five year IT services deal with the transmission system operator Gastransport Nord, whilst Swedish municipality Nacka extended its operating agreement with Tieto. Level 3 Communications announced that Hogarth Worldwide has selected its network connectivity and colocation services, whilst Colt reported that it has designed and deployed a managed IT infrastructure and networking service for Source UK Services and also that it provided data centre services to the International Berlin Film Festival. Other notable events during the period saw search giant Google set to build a second data centre in Dublin at a reported cost of 159 million, whilst customer relationship management software company, Salesforce reported that it will open a new data centre in the UK in the summer and will follow that up with new data centres in France and Germany in 215. Q1 214 European Data Centres MarketView 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 function. For instance, Steria reported just such an initiative by securing a wide ranging contract to help to drive efficiencies within Gloucestershire County Council's ICT infrastructure. The quarter also provided evidence that retail colocation providers have benefited from the continued demand for ready-to-market product. Interxion signed a deal with California based library software company Innovative Interfaces, to host its services within its Dublin data centre, whilst also announcing that GH Financials signed a hosting deal at its City of London data centre. At the same facility Interxion secured a cloud and colocation data centre services deal with OptionsCity. In addition, Lisi Automotive, a provider of assembly solutions for the automotive industry chose TelecityGroup's data centre in Paris to host its European IT infrastructure. TelecityGroup also secured a contract to supply data centre services at its Amsterdam Science Park facility to SURFsara, the principal provider of large-scale computing power to the Dutch academic community. In addition, Online 5, has chosen a private suite in City Lifeline's London data centre, whilst in Poland, The Polish State Fund for Rehabilitation of Disabled Persons is utilising a managed dedicated hosting facility provided by GTS Poland. 5 The quarter also saw the Ministry of Justice reportedly signing a 11.5 million data centre deal with Ark, the UK provider of data centres with facilities in Corsham, Wiltshire and Farnborough, Hampshire, whilst Infinity SDC launched the first phase of its Slough data centre with the first two contracted customers already installing their equipment. IT integrators and carriers also proved to have a busy quarter with a number of notable deals being completed. 5

6 Q1 214 European Data Centres MarketView TAKE-UP & DEMAND INVESTMENT AND OUTLOOK Investment The first quarter of 214 has seen little published evidence of direct real estate investment activity amongst data centres. One exception saw the German telecommunications and energy company, 3U Holding acquire two buildings totalling some 7,345 sq m, one of these being a data centre of 3,67 sq m. The purchase price was undisclosed. The first quarter did, however, provide further evidence that the sector is experiencing continued buoyant merger and acquisition activity, as companies seek to build their presence in the IT infrastructure industry. For instance, the global specialist in energy management, Schneider Electric acquired Spanish modular data centre provider, AST Modular, to add capabilities to its existing position in the prefabricated data centre solutions market. Elsewhere, managed services providers Claranet acquired the Portuguese managed hosting and applications provider Echiron, whilst in Spain, Ibercom agreed to buy data centre Digital Valley for an undisclosed price, whilst in Germany, PlusServer, a provider of managed hosting and IT outsourcing solutions, acquired the hosting activities of synergetic AG. One of the larger transactions saw Dimension Data acquire selected subsidiaries of NextiraOne, the European business solutions provider. The transaction will see Dimension Data acquire NextiraOne's businesses in Austria, Belgium, the Czech Republic, Germany, Hungary, Ireland, Luxembourg, the Netherlands, Poland, Portugal, Slovakia, Spain and the United Kingdom. In the UK, Alternative Networks acquired ControlCircle, a UK based provider of managed hosting for a reported 39.4 million whilst London Data Exchange who operate a 5 rack data centre in North West London reported the merger with Ping Networks to form the LDeX Group. Forecast The generally positive nature of current forecasts for economic growth across Europe bodes well for prospects for the data centre industry across the continent. The cloud remains an integral driver of growth for the data centre industry with an increasing trend for enterprise businesses to move their information technology services, applications and infrastructure to a cloud-based architecture. Recently published research from IHS Technology suggests that global business spending for infrastructure and services related to the cloud will reach an estimated US$174.2 billion this year, up a hefty 2% from US$145.2 billion estimated for 213. Further evidence of this trend is provided by recent research by IDC, which forecasts that global cloud computing was an estimated US$47.4 billion industry in 213 and is expected to more than double to US$17 billion by 217. The cloud's 23.5% compound annual growth rate is five times faster than that of the broader technology market. In the UK, the managed services provider, Adapt announced results from a survey that suggested opportunities for cloud providers are unlikely to diminish in the near future, with around half of all respondents expecting to make big changes to their cloud platforms in the next 12 months to accommodate growth and the vast majority (93%) claiming that they have not yet been able to utilise the cloud fully. Therefore, whether it is through third party outsourcing partners, or direct corporate operations, it would appear that the drive of cloud computing uptake is set to continue to underpin the expansion of the European data centre market through 214, as businesses look to deliver IT efficiencies and flexibility through the cloud model. Others have chosen different routes to expand their exposure to the technical real estate market, US data centre company, Switch SUPERNAP, for example has set up a joint venture with Egyptian tycoon Naguib Sawiris to win business in Europe, Asia and the Americas. The joint venture with Accelero Capital and Orascom TMT Investments will build and operate data centres for clients outside the US. 6

7 MARKET FOCUS LONDON A steady increase to the number of new market enquiries and improved transaction volumes at the beginning of 214 offer an encouraging outlook for the year ahead. Total take-up for the first quarter was 3,748 sq m, 61% higher than that achieved in the Q1 of 213. Included in this total are two transactions of above 1MW, a requirement size that has become less common in recent years where contrary to recent reports the typical size of transactions remains below 5kW. The evidence of some sizeable contract awards in Q1 follows a particularly active end to 213 and lends support to opinion of an upturn in occupier confidence with stronger commitment to IT spending being the result. The return to a growth economy in the UK is part good reason to support this renewed optimism. The latest IMF forecasts suggest that the UK will grow by 2.9% in 214, the highest of the G7 countries. London is of course the engine behind the growth currently accounting for 22% of UK's total output and latest figures indicate that around 4% of the world's largest companies have an established base in the city. With the huge pool of potential demand it is of little surprise that the city remains the focal point for an increasing number of differing service providers, all of whom create a sustained customer base to the capital s data centre operators ongoing investment in new data centre space being the logical result. Data centre supply levels continued to rise in the first quarter reaching 297,898 sq m at the close. This total is now close to twice the size of Frankfurt, the second largest market in Europe. Recent supply additions include the completion of the 4, sq m final phase of Equinix's LD5 facility with attention now directed toward the first phase of the new LD6 due for opening in Q Colt confirmed the addition of a further 1, sq m at their Welwyn facility, with Telehouse also announcing that fit out of the latest 1, sq m tranche of colocation space was complete at their Telehouse West facility. Q1 214 European Data Centres MarketView FRANKFURT 7 Following a solid end to last year, strong letting activity in Q1 has reaffirmed opinions that the Frankfurt market is currently Europe's most active in terms of demand growth. Recent operator activity lends support to this view with Interxion's decision to accelerate construction of their FRA8 facility after citing strong increases in customer demand. Total recorded market take-up was 6,57 sq m during the first quarter, the highest quarterly total in the city since 29 and already close to 58% of the total space contracted last year. This total includes further examples of larger transaction sizes which have become more frequent in recent months. Driving new demand is the return of occupier confidence which has been building as a result of a stable German economy. The latest growth forecasts for the country are relatively modest, 1.9% this year and 2.3% next. However this is providing the platform for major corporates to re-engage a forward planning strategy where IT capability appears to be integral to business growth. Central to current corporate planning is the adoption of a hybrid IT solution. The benefits of flexible, scalable and on-demand services offered by cloud are particularly attractive to corporate decision makers, although nervousness remains around data control and security. The hybrid option appears to answer some of those concerns. The important underlying prerequisite to acceptance to this type of solution is that data is retained in country. This factor remains key to data centre market demand currently. Cloud service providers are identified as the dominant sources of new requirements. The strategy is to secure sufficient capacity and growth options in German data centres today in order to gain a market advantage from the forecasted rise in corporate hybrid cloud deployment. Frankfurt's considerable corporate base should ensure that this interest from service providers will be maintained, at least for the short term. 7

8 Q1 214 European Data Centres MarketView MARKET FOCUS PARIS Following significant letting activity at the end of last year, the Paris market has enjoyed a stable start to 214 with take-up levels close to the longer term average. Total take-up in the first quarter was 1,415 sq m, an encouraging start although significantly short of comparable European cities where consistent larger scale demand appears to be returning. The challenge for Paris is that as a data centre location it is not viewed as having the same connectivity significance as some other major European centres. AMSTERDAM IT service providers currently form the predominant source of new European demand, where connectivity is central to their list of requirements. This has meant that where customers are flexible on location choice, cities such as Amsterdam and Frankfurt are preferred. Demand in the Paris market is traditionally centred on the locally situated and multi-national corporates headquartered in the city. There is evidence that the appetite to outsource IT has begun to gain traction from this source with the significant letting of last year falling to a large global end user. Dual site requirements are also becoming a more prevalent from the corporate occupier. A need to split IT services is being incorporated in to current strategy to achieve disaster recovery aspirations and to take advantage of pricing differentials between central, out-of-town and even out-of-country locations. The earlier reported pricing pressure in the city does appear to be lifting following indications of returning demand. However new requirements in Paris are still attracting particularly competitive offers. Alongside Frankfurt, Amsterdam continues to be the location of choice for connectivity-driven requirements in early 214. Cloud service providers, ISPs, CDNs and systems integrators remain the most active players in the market and have accounted for the majority share of concluded transactions in the first quarter. Total take-up in Q1 was 4,786 sq m, the highest single quarter of take-up since the end of 212 and a total equivalent to 77% of that achieved last year. The strong start to the year is reflective of the high level of market enquiries noticeable toward the second half of 213, an observation shared in the latest interim statement released by TelecityGroup which indicated that trading conditions in the city remain robust. The announcement by Interxion of their decision to speed up the delivery of new space at their AMS7 facility is another firm indication of heightened customer demand. The release of new space in the Amsterdam market has been frequent in recent years with total supply rising at the fastest of the major locations. Supply levels have increased by 54% in the past five years, close to double the rate of London, a signal of the operator confidence in sustained demand for data centre services. Overall availability at the end of the quarter continued to edge up slightly but the market remains well balanced at 15.34%. MADRID 8 It is too early to tell if the green shoots of recovery now emerging from the Spanish economy are inspiring much confidence toward new IT investment, however the beginning of 214 has recorded encouraging hints of new market activity. The latest economic report for 214 indicates GDP growth of.4% in the first quarter with expectation of a positive outlook for the year. Up until now Madrid's considerable corporate community has shown reluctance toward spending of any kind, an understandable stance given the recent recession. These latest economic figures however may provide a catalyst for some to invest in IT infrastructure now whilst prices remain very competitive. As at the first quarter, total colocation take-up was 193 sq m, small in comparison to the other major markets in Europe, but consistent with the longer term quarterly average for Madrid. Typically where new requirements have been pursued these continue to be small scale and subsequently a steady flow of rack sales produces a relatively low total overall. With demand remaining subdued, limited examples of new supply have been forthcoming in recent months. One item of positive news has emerged in the first quarter however with Interoute announcing the completion of their new 4,5 sq m data centre. Investment in new facilities is a good gauge of operator belief toward demand growth. It also provides insight into current thinking where the focus of future occupiers might emerge with Interoute targeting growth in the cloud deployment.

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 ,898 52, % 3,748 3,748 Q ,997 51, % 2,334 2,334 Frankfurt Q ,362 21, % 6,57 6,57 Q ,822 19, % 3,795 3,795 Paris Q ,874 13, % 1,415 1,415 Q ,174 14, % Amsterdam Q ,796 15, % 4,786 4,786 Q ,429 15, % 1,169 1,169 Madrid Q ,64 1,6 3.46% Q , % European Tier 1 Total Q ,994 14, % 16,712 16,712 Q ,986 11, % 8,786 8,786 Q1 214 European Data Centres MarketView EUROPEAN MARKET ACTIVITY 9 LOCATION QUARTER London Frankfurt Equinix will build a new datacentre LD6 in its Slough campus. The new facility will provide total capacity of approximately 8, sq m; the first phase is scheduled to open in in the first half of 215. NaviSite Europe has signed two long-term leases with Digital Realty's data centres in Woking and Redhill. Telehouse has opened its final phased floor with 1, sq m of available colocation space at its Telehouse West data centre Digital Realty broke ground on a new 13, sq m data centre facility for Rackspace in Crawley, West Sussex, the site sits across a 15 acre campus and will eventually comprise of four data suites with a total 1MW capacity. e-shelter has started work on building the second phase of its proposed four phase Frankfurt 3 data centre in Rüsselsheim. The new building, to be completed in the first quarter of 215, will provide approximately 4,4 sq m of space. Iaas provider, NextPointHost announced a new addition to its network of data centres with a new Tier 4 facility in Frankfurt. Interxion opened its 8 sq m FRA 9 facility in the first quarter of the year and has a further 9 sq m of space at its FRA 8 facility due to open in the second quarter of this year (Phase 1) and a further 9 sq m (phase 2) due to open in the same facility in the final quarter of 214. Paris SFR has hired HP, Schneider Electric and Cap Ingelec to build a modular data centre in the Paris suburb of Trappes, with completion set for early 215 Lisi Automotive, a provider of assembly solutions for the automotive industry, has chosen TelecityGroup's data centres in Paris to host its European IT infrastructure. The US based cloud hosting provider, Host Virtual has added capacity to its data centres in London, Amsterdam and Paris in response to increased demand for its services Amsterdam Madrid Global Switch has launched the first phase of a planned expansion to its existing data centre in Amsterdam. The phase was pre-let to a leading international telecommunications services provider who is now in occupation. EvoSwitch signed a contract with Phoenix NAP, a US based data centre and infrastructure-as-a-service provider, for the provision of colocation space in its Amsterdam data centre. TelecityGroup signed a contract to supply data centre services to SURFsara, a provider of computing power, cloud services and data storage to the Dutch academic community to be based at its Amsterdam Science Park facility. Juniper Networks is increasing capacity by 4% at the Schiphol-Rijk data centre facility; up from 3,7 sq m to 5,2 sq m Interoute has announced the opening of its new 4,5 sq m distributed data centre in Madrid. Vodafone Group has agreed to buy Spanish cable operator Grupo Corporativo Ono in a reported 7.2 billion transaction. The Spanish telecom company Ibercom has agreed to buy the Spanish data centre business Digital Valley. 9

10 Q1 214 European Data Centres MarketView MARKET FOCUS COLOCATION SUPPLY WATCH London 35, 3, 25, 2, 15, 1, 5, Q1 2% 18% 16% 14% 12% 1% 8% 6% 4% 2% % Frankfurt 2, 16, 12, 8, 4, Q1 25% 2% 15% 1% 5% % Paris Amsterdam 12, 1, 8, 6, 4, 2, Q1 14% 12% 1% 8% 6% 4% 2% % 12, 1, 8, 6, 4, 2, Q1 25% 2% 15% 1% 5% % Madrid Key 35, 3, 25, 2, 15, 1, 5, Q1 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 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. Q1 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 Q1 214 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.