Our most recent Market Spotlight featured Managing Director for EMEA, William King and Senior Consultant, Rupert Duckworth, discussing the London data centre market.
What they found was interesting. London’s data centre market stands out with its diverse ecosystem of dedicated “wholesalers,” including VIRTUS Data Centres, NTT, NGD (acquired by Vantage Data Centres), and Ark Data Centres. Notably. These players continue to secure multi-megawatt deals from public cloud providers, making them key players in this dynamic landscape.
Ranked as the second-largest data centre market worldwide, London has been propelled by its financial industry’s early adoption of data centres and fiber optic connections outside telecommunication switching houses. This strategic move led to Slough emerging as a significant development location. The advent of the public cloud further accelerated the market, with The London Docklands and Slough in West London becoming prominent submarkets boasting 521.52MW live IT power.
London’s data centre market has witnessed remarkable growth over the past years, with supply doubling from 1,000MW in 2018 to 2,000MW in 2022. The region recorded over 180MW of take-up in 2022, with major players like Microsoft Azure, Google Cloud, and Amazon Web Services (AWS) driving the demand for wholesale facilities.
While London’s colocation capacity contributes significantly to its live IT load, the presence of hyperscalers like AWS and Microsoft indicates a growing appetite for wholesale data centre development. The city’s hyperscale pricing of £100 per kW per month GBP (+/-15) demonstrates the potential for accommodating large requirements and the design needs of these tech giants.
Despite supply constraints, London’s data centre market is expected to continue its growth trajectory. As hyperscalers and data centre operators encounter supply limitations in London’s established clusters, their attention is increasingly turning towards emerging markets. These emerging markets offer a host of compelling benefits, making them attractive destinations for data centre investment and development, as they represent a relatively untapped territory, with ample room for expansion and growth, while providing a strategic position for future scalability.
Emerging markets also tend to offer cost savings, making them attractive for long-term data centre investments, and contribute significantly to the economic development of local communities by generating job opportunities and attracting further technology investments. Their strategic geographic locations also provide opportunities to serve nearby markets efficiently and diversify data centre operations, reducing risks associated with concentration in one location. As a result, hyperscalers and data centre operators are drawn to these emerging markets, anticipating a bright future for data centre growth, innovation, and economic impact in these up-and-coming regions.
While London’s data centre market presents a dynamic landscape with immense potential, the supply constraints are prompting hyperscalers and data centre operators to explore emerging markets. These markets enable efficient service to nearby markets and diversify data centre operations, attracting investment and anticipating a promising future for growth and innovation in these regions.
To read the full London Market Spotlight, click here.
