This quarter, the Knight Frank Data Centre report focuses on EMEA. The adoption of cloud-based services by business and social media by consumers continues to drive the development of data centres in the region. After a record-breaking year in 2021, M&A activity has continued at pace as both enterprise and consumer-oriented cloud markets continue to grow rapidly.

A drop off in new supply in the region has been notable in 2022, as markets wait for IT capacity to come online. Across the 11 locations studied this quarter, only Nairobi registered an increase in aggregate supply as many of the markets recorded significant growth either at the end of 2021 or in Q1 2022. Zurich and Johannesburg continue to record above-trend levels of take-up, as wholesale operators absorb public cloud demand. During Q2, there was a 43% increase in recorded take-up across the 11 markets as hyperscalers continue to aggressively expand their operations.

In Africa, even though supply remained stable in Johannesburg at 241MW, the market remains the largest on the continent. Since 2020, aggregate supply in the market has increased over 162%, with 149MW added over the period. As hyperscaler demand diversifies across the continent, Nairobi is primed to be one of the main beneficiaries. Headline activity included, Cloudoon adding 10MW to the total supply in Q2 after announcing the construction of MAS01. To provide perspective, the total supply for the market is 60MW. The London Internet Exchange also announced it is forming a strategic relationship with IX Africa as Nairobi looks to become the technology hub for Eastern Africa.

Zurich continues to record strong demand in 2022, with 7.9MW of take-up recorded in Q2. The market averages around 6MW of take-up per quarter since the beginning of 2021. Zurich is also attracting significant investment, with the acquisition of Safe Host by IPI a good example. The company is now operating under the STACK infrastructure brand. Following the acquisition, four out of the five largest operators in the market are now international companies.

Warsaw and Istanbul recorded limited market activity in Q2. Power constraints continue to impede new supply in Warsaw, with additional investment required into the grid to support growth. In Istanbul an increase in activity in Istanbul is expected as hyperscaler interest intensifies. Egdnex for example, acquired a site earlier this year and other operators are looking to either expand or enter the market.

Although the second quarter registered muted development activity, record activity over the last two years have meant that a slowdown was due whilst supply is absorbed. We continue to see significant investment into EMEA as companies look to benefit from hyperscalers expanding their operations.