According to research by the consultant CBRE, the data centre vacancy rate in Europe is expected to fall to 9.7% by the year end, down from 11.9% at the end of Q3 which would be the first time that the European annual vacancy rate has closed in single-digits.
The vacancy rate is already less than 10% in the top five markets, Frankfurt, London, Amsterdam, Paris and Dublin, the so-called “FLAPD” markets. The decline of availability has two causes, CBRE said: Hyperscalers’ strong appetite for capacity; and the difficulties providers are having securing the necessary resource to build facilities.
The firm pointed out that take-up regularly exceeds new supply in most large European metro markets. CBRE believes annual take up will reach 705MW while the expected level of new supply is 644MW.
There will be an estimated 456MW of available capacity by year end in Europe, the lowest year-end figure since 2018 when there was 359MW although the market at that time was nearly a third of the size of the predicted 4.7GW of capacity set to have been delivered in Europe by the end of this year.
“With vacancy rates across Europe expected to drop to record lows, organisations are struggling to source the capacity required to support their growth plans,” said CBRE’s head of European data centre research Kevin Restivo.
“Given the lack of availability in primary markets, we are seeing some organisations turning to smaller markets as a solution,” Restivo said. Secondary Data Centre Markets in Europe include Berlin, Brussels, Madrid, Milan, Munich, Oslo, Stockholm, Warsaw, Vienna, and Zurich.
“Buyers need to take a long-term view of the market if data centres are to be an integral part of their business and IT strategies,” Restivo added.