London to become ‘Gigawatt’ colocation hub by 2023 as Covid-19 fails to dim datacentre demand

The soaring demand for cloud and internet-based services across the UK will contribute to London becoming one of four European colocation hubs with an excess of 1,000 megawatts (MW) of live IT power by the year 2023, it is claimed.

According to a report published by global property consultancy Knight Frank, in conjunction with datacentre market watcher DC Byte, the city is one of the four biggest colocation hubs in Europe (along with Frankfurt, Amsterdam and Dublin), which are set to get even bigger over the course of the coming years.

So much so, the report predicts all four are on course to achieve “Gigawatt Market” status by 2023, as the total supply of live IT power within these respective colocation hubs exceeds 1,000 MW.

London currently has more than 1,200 megawatts of IT power either live, under construction or in throes of planning. Dublin, meanwhile, has around 1,100 megawatts in these three states, followed by Frankfurt (1000 megawatts) and Amsterdam (sub-1000 megawatts).

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These four hubs are classified as “top-tier markets”, but there are nuances in terms of the types of datacentres they contain, the report states, with London and Frankfurt predominantly containing wholesale colocation facilities. Dublin features a mix of hyperscale and private enterprise server farms, while Amsterdam’s has a growing proportion of hyperscale facilities.

These four hubs are, however, far from the only European cities that are benefiting from the growing demand for colocation capacity, as the report makes reference to the emergence of secondary hubs that are also experiencing fast take-up too.

Madrid, Copenhagen and Warsaw, for example, are name-checked in the report as being the fastest-growing European datacentre hubs with more than 700MW of colocation capacity either planned or in active development.

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The growth of Madrid and Copenhagen is primarily down to Amazon making sizeable datacentre investments in the former city, while Facebook, Google and Apple have also embarked on builds in the latter hub.

“Zurich, Berlin and Warsaw [are also] showing enormous growth due in part to the expansion of cloud regions. The opportunity for built-to-suit operators to invest in these markets is also greater than in more established markets due to the high barriers to entry associated with large scale deployments in new markets (with hyperscalers normally opting to work with local providers when moving into new markets),” the Knight Frank report states.

The Covid-19 coronavirus pandemic has not dampened demand for colocation capacity at all, the Knight Frank/DC Byte data confirms, as the European datacentre sector has attracted more than £23.5bn during the first half (H1) of 2020, while colocation take-up rates were 50% higher than in 2019 H1 at 282MW.

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Stephen Beard, partner and head of Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) datacentres at Knight Frank, said: “We predict the sector will only continue to grow in importance, particularly given the increased remote working and digitisation of companies as a result of the Covid-19 pandemic.”

Looking ahead, Knight Frank said it expects the European datacentre market will continue to expand over the course of the coming year, with 2021 seeing “at least” a 10% increase in take-up as enterprises continue to accelerate their adoption of public cloud services.

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However, there are signs on the horizon that some of the hyperscale cloud and internet firms may start taking their datacentre buildout plans into their own hands in order to ensure they have sufficient and suitable types of capacity to meet demand.  

To this point, Ed Galvin, founder and CEO of DC Byte, said: “The technology giants are increasingly self-building which has the potential to rapidly change the datacentre landscape as they move away from the short-term flexibility of the colocation model. “At the same time, build-to-suit is becoming more prevalent as colocation operators tap into hyperscale demand,” he said.

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