Data Centre Market enters 2010 instilled with greater confidence

According to Jones Lang LaSalle’s newly published, third Data Centre Barometer (DCB3), 60% of Developers have identified demand during the first half of 2010 as an important factor in their decision making process whilst a further fifth identified expected demand.

Mark Larard, director in Jones Lang LaSalle’s Data Centre team said: “The theme towards the end of 2009 was one of steady progress. Q2 saw over 50% of the year’s total Data Centre take up, and June to August saw almost 75% of transactions. The return of the Banking sector to the Data Centre market is noticeable, in a small, but nevertheless significant way, accounting for almost 60% of new take-up during the second half of 2009.”

Mark continued: “The size of the average transaction remains at under 10,000 sq ft and the largest at 22,000 sq ft: this we believe will continue for 2010. Occupiers will take small amounts of technical space, to supplement their existing core holdings. Budget restrictions will mean that there will be limited forward planning, and operational reasons will dictate that space will be taken at relatively short timescales, wherever Data Centre accommodation can be secured. This is not the age of the stand-alone Enterprise Data Centre, but of the Colocation Operator or Developer who can raise sufficient finance to get one step ahead of its competitors.”

Other findings from the report show that 2010 is likely to see companies review and assess their occupation of outsourced managed space. Over half of the respondents to the survey indicated that they would keep their occupational profile at the same level, whilst one in five are expecting to expand their reliance on externally managed technical space.

Mark concluded: “The Barometer highlights that lack of new Data Centre product continues to push rents up, and this combined with the uncertainties of the UK Government’s Carbon Reduction Commitment is already pushing occupiers to consider locating their data outside the UK. The UK Data Centre market must remain competitive in the international marketplace, and the UK Government must recognise the knock-on implications of losing the dominance that it currently holds.”