CB Richard Ellis Reports Lowest London Data Centre Take-Up Since Statistics Began
London, 3rd July, 2008 – CB Richard Ellis, the world’s leading real estate advisor, has announced that take up in the first quarter of 2008 London data centre market has been impacted by the current constraints in the capital markets, with no corporate take up and abnormally low figures generally.
This dip in what has been a particularly buoyant market is the result of uncertainty amongst the Financial Services sector, which has made the full extent of IT budgets unclear. We expect this fog to lift throughout the course of the year, as the underlying demand drivers for the product across all sectors remain strong.
The Frankfurt market had an excellent first quarter with take-up of 11,180 sq m which represents 60 per cent of total take-up across the Tier 1 markets. All take up was apportioned in the Carrier Neutral Hotel (CNH) market of which 53 per cent was to corporates, 45 per cent to technology and 2 per cent in retail transactions.
Total market take-up for the European Tier 1 market in Quarter 1 was 18,620 sq m, a decrease on the previous quarter of 64 per cent. However, compared with Quarter 1 2007 this represented a reduction of only four per cent. Take up in Quarter 1 was mainly in the CNH market, 18,160 sq m (98 per cent), with the remaining 460 sq m (2 per cent) in threat stock.
CNH take up was split between Frankfurt (61 per cent), Paris (28 per cent), London (4 per cent), Amsterdam (3 per cent) and Madrid (4 per cent).
Andrew Jay, Head of Technology Practice Group, CB Richard Ellis, said: “This has been the lowest quarter for take-up in London since the emergence of the corporate market in 2004. London has been significantly affected by the current financial climate due to the large number of financial services companies in the market. Although Quarter 1 take-up has been low, there are a number of large deals that will come to fruition in 2008 and while we will not see the same levels of take-up as last year, which was a record-breaking year, we do expect levels to exceed those of 2005 and 2006.
“The European Data Centre Market appears to be showing some signs of resilience compared with the overall real estate market. The strong levels of take up we have seen in Frankfurt since the middle of last year are continuing, with encouraging figures in Paris and Madrid and as such, the Tier 1 data centre market remains buoyant despite the effects of the credit crunch on the corporate sector.”
Contact: Kieron Smith FD Tamesis 020 7269 9363 Kieron.smith@fd.com
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