Virtus £500m London Investment
Virtus Data Centers, a major London data center provider, made an announcement last week that they are planning to spend £500 million to add five data centers across its two existing campuses in London.
The demand for data center space, especially in larger European cites is exponentially growing fast. There is still a very steady demand from traditional enterprises like retailers and banks, but there is an unprecedented rate of growth in many top data center markets that is mainly being driven by hyperscale platforms such as Amazon Web Services and Microsoft Azure. London is Europe’s largest data center market.
As well as other providers, Virtus is building to stay ahead of the ballooning demand. In December, it finished planning a new London data center, and as for last week, the company said that more than 70% of the facility is under contract. Two of the three Slough data centers are due to go live this year and both already have anchor tenants signed, according to the statement of last week. As well, Stockley Park data center completed last July is already 75% leased, they added.
“Given the significant increase in quarterly take-up, the developer-operators are challenged to bring on new supply fast enough,” authors of a recent CBRE report on the four biggest European data center markets (Frankfurt, London, Amsterdam, and Paris, or “FLAP”), wrote.
In the report, that covers the market dynamics in the third quarter of 2018, the commercial real estate brokers projected that data center providers would have close to 1,600MW of capacity across the FLAP markets this year. And of this estimated there is 1,300MW that is set to be under contract by the end of the year.
Between the start of 2018 and the end of the third quarter, data center providers leased 50MW of capacity in London, according to CBRE (United States Commercial Real Estate Services). No European market has ever seen that much absorption over three quarters previously to the report’s authors comments.
Two-fifths of that was leased in the third quarter, including “a large double-digit transaction” with a hyperscale client by Virtus in Stockley Park.
The two new Stockley Park data centers Virtus announced this week will add up to 40MW to the campus, which will double its current capacity, the company said. The three new Slough facilities will add 36MW, bringing the campus’s total capacity to 63MW.