We are pleased to present our Q3 2021 review of the EMEA data centre market.
2021 brought uncertainty as to what demand would look like after the accelerated buy-cycles of the initial COVID reaction. After some steady growth in Q1 and Q2, the third quarter has seen a drop-off in new supply coming online. Total supply for the region increased by around 200MW, compared with growth of 400MW in Q2 and just under 300MW in Q1.
Among the leading supply increases were London with 57 MW, driven by self-build announcements. One of the major highlights was Amazon Web Services (AWS) receiving planning approval to develop at three sites in Didcot, Bracknell, and Swindon. We believe that cloud operators will be looking to set up new regions in the UK that will continue to drive growth.
Johannesburg also saw a significant supply increase. After 70MW was added to market supply in 2020, the first half of 2021 registered limited activity. The third quarter however, has brought 80MW of new supply, demonstrating the growth trajectory of the city and region.
A supply increase of nearly 40MW was also registered in Moscow as regional providers advanced developments in reaction to new demand. The supply increase was close to that registered in the first quarter.
The strongest demand remained in the core markets. Most noticeably, take-up in Dublin was just over 60MW, up from 34MW filled in the second quarter and 21MW in the first quarter. London sold an additional 25MW, while Frankfurt recorded take-up was 17MW.
Added to our EMEA market reporting this quarter is Bucharest, with the market poised to become a data centre hub in south east Europe. The strong network density offered by Cluster Power and direct links to Frankfurt and Amsterdam is supportive of this, with Cluster Power starting construction of the first wholesale data centre in Romania, eventually reaching 13.5MW.
THE APAC MARKET
The Q3 2021 Knight Frank Data Centre Report continues our coverage of the APAC region. Market analysis includes both established data centre hubs such as Singapore, Hong Kong, Mumbai, Sydney, Seoul, and Tokyo; and fast growth markets including Hanoi, Bangkok, Shanghai, and Kuala Lumpur to provide the best view of the region.
APAC MARKET SUMMARY, Q3 2021
The third quarter saw development and deal activity accelerate in several markets across the APAC region. The highlight of the quarter was Vantage Data Centre’s acquisition of Agile Data Centre’s business – totaling almost 170MW across key markets of Tokyo, Osaka and Melbourne – as well as taking on PCCW’s data centre portfolio of 100MW across Hong Kong and Malaysia.
Total supply (live, phased, and under construction) in APAC increased almost 450MW in Q3, bringing total capacity in the region to over 7,700MW. Take-up was around 100MW, which is consistent with the quarterly average throughout 2021.
Mumbai recorded the largest supply increase, with nearly 200MW added in Q3, a 26% increase in one quarter. This is driven by several major announcements, most notably from Nxtra by Airtel, the JV by Everstone and the Yondr Group, Digital Realty and Brookfield Asset Management; as well as regional players Ascendas India (part of CapitaLand) and new entrant Mantra Data Centre.
Shanghai added just over 170MW, a 10 percent growth in total market supply, a slight drop from the over 200MW increase in Q2. Shanghai’s estimated aggregate supply now stands at well over one and a half gigawatts. This is largely driven by ten new data centre projects which have been approved by the Shanghai Municipal government, as part of a digital transformation plan for the 14th Five-Year Plan (2021-25).
Sydney also saw renewed interest from hyperscale operators, with Q3 supply increasing by a further 46MW, bringing the total increase for the first three quarters of 2021 for the Sydney market to over 100MW. In the past five years, Sydney’s data centre market capacity has risen from around 200MW in 2016 to nearly 650MW by the end of 2020. The highlight of Q3 2021 was Equinix’s announcement of a US$575 million joint venture with PGIM Real Estate to enter the hyperscale market in Australia, with their first two xScale data centre deployments in Sydney.
Aggregate supply for Seoul increased to around 575MW, a Q3 increase of 25MW, with about 120MW of this under construction and coming online over the next few years. We note increasing interest shown by hyperscalers and international operators in the greater Seoul market.