The European Data Centre Industy Sees Influx Of Investment

Investment in the European data centre industry hit $8.7 billion in the second quarter, according to global real estate advisor, CBRE.

Market consolidation continues to drive M&A activity and the geographical spread of investment activity is becoming more diverse as demonstrated by Singapore’s ST Telemedia purchase of a 49% stake in London’s Virtus and Japan’s NTT acquisition of the pan-European operator e-shelter.

Driving such investment is the buoyancy of the four core data centre markets – the FLAP cities of Frankfurt, London, Amsterdam and Paris. Robust demand within these European markets is providing a solid foundation for inward investment. This demand is exemplified with take-up at mid-year reaching 31.8MW and in line to surpass the five-year annual average of 60MW.

Out of the FLAP markets, London was the star performer in the second quarter. Driven by a resurgence in demand from traditional commercial sectors and a high volume of large scale transactions by both wholesalers and retailers, London has recovered well from a sluggish first quarter.

Andrew Jay, EMEA Head of Data Centre Solutions, at CBRE
“The data centre sector continues to rapidly expand with M&A activity the talk of the industry. The sector is at an all-time high for investment activity and this has driven prices to historically high levels.

“High barriers to entry and the capital intensive nature of the business are keeping investors interested which is why we expect to see more M&A activity and consolidation amongst European data centre operators throughout 2015.”
Andrew Jay, EMEA Head of Data Centre Solutions, at CBRE