Transcription
C B R ED A T AC E N T E RS O L U T I O N SN O R T HA M E R I C A ND A T AC E N T E RM A R K E TO U T L O O K
D A T ACBRE DATA CENTER SOLUTIONS 2018 CBRE, Inc.C E N T E R S2NORTH AMERICAN DATA CENTER OUTLOOK 2019
DATA CENTER OUTLOOKSUM MARYThe U.S. wholesale data center market retained strong marketfundamentals throughout 2018 and is poised for growth intoFIGURE 1: PRIMARY MARKETS - NETABSORPTION % PRE-LEASING2019. Factors impacting the sector include hyperscale cloudproviders and enterprise companies seeking to capitalize on300the growth of global data consumption and the rapid250edge computing and 5G. We also expect continued adoption200MegaWattsevolution in technology including the Internet of Things (IoT),by our end-user clients of a Hybrid IT strategy combiningtheir technology needs into strategic relationships with150100colocation providers and multiple cloud services. Agility andflexibility for colocation, IT services and investment will be50key themes for the data center industry in 2019.020162017Q3 2018 YTDNet Absorption (MW) Pre-leased (MW)SUP PLY AND DE M A N DSource: CBRE Data Center Solutions, Q3, 2018.Through Q3 2018, the U.S. wholesale data center marketabsorbed over 215 megawatts (MW). The growth is attributedto the strong demand largely from hyperscale cloud providersFIGURE 2: INVENTORY GROWTH OFPRIMARY DATA CENTER MARKETSSINCE 2015as demand continues to outpace available supply. Largeabsorption occurred in the seven primary U.S. data centermarkets: Atlanta, Chicago, Dallas/Ft. Worth, New York120%Tri-State, Northern Virginia, Phoenix and Silicon Valley. 2018100%year-to-date recorded absorption for the U.S. primary markets% Growthis 80% of the 2017 record level and remains a bullish indicatormoving into 2019.80%60%The growth in North American data center markets over the40%last three years is a result of the changing diversity of end-20%user’s requirements. Not only have we seen growth in primary0%markets, secondary and tertiary markets have started tocapture demand as companies are growing throughDallas/Ft. Worth Silicon Valley Northern VirginiaChicagoPhoenixNew YorkTri-State RegionAtlantaSource: CBRE Data Center Solutions, Q3, 2018.integration of technologies such as edge computing and 5G.Moving into 2019, the expansion into new territories isexpected to continue and places an emphasis on speed-to-Agility and flexibility formarket deployments for available capacity.colocation, IT services andinvestment will be keythemes for the data centerindustry in 2019.CBRE DATA CENTER SOLUTIONS 2018 CBRE, Inc.3NORTH AMERICAN DATA CENTER OUTLOOK 2019
DATA CENTER OUTLOOKFIGURE 3: DATA CENTER VS. INDUSTRIAL CAPITALIZATION RATE COMPARISON1110Cap Rate (%)987654200920102011201220132014Source: CBRE Data Center Solutions Q3 2018, Real CapitalAnalytics, Q3 2018.ENTERPRI S E C AP I TA L M A R K ET S AC T I V I T Y2015201620172018Average Data Center Cap RateMin Data Center Cap RateMax of Data Center Cap RateAverage Industrial Cap Rateconnected devices will drive big data and compute capacity inthe coming years. Edge locations will be key to improveInvestment in the data center space was abundant in 2018. Aend-user experience and network reliability. We anticipaterecent influx of capital from both global investors and newsmaller, scalable deployment requirements in secondary andcapital sources, including private equity and infrastructuretertiary markets as a result.funds, created a competitive investment landscape. Datacenters remain a viable option to diversify investmentB LOC KC HA IN A ND C RY PTOC U RRENC Yportfolios as capitalization rates for core wholesale datacenters approach industrial capitalization rates. Investmentin the form of partial sale-leaseback and traditionalBlockchain technology and cryptocurrency activity emergedtransactions are expected to continue as enterprises seekas a meaningful percentage of data center demand for CBREagility in the structure of their data center assets.Data Center Solutions in 2018. This developing technologyraises many questions for investors and data center providersalike. As the blockchain space stabilizes, we anticipate anIMP O RTAN CE O F N ET W OR K AC T I V I T Yemergence of unique colocation spaces with low cost power,The roll-out of 5G emphasizes the demand on networkblockchain processing and cryptomining. CBRE transactedimprovements and highlights the expansive upside of theover 20 MW of blockchain space in 2018 and has over 150 MWdata center market. The increase in IoT technologies andof transactions in the pipeline for future deployments.reduced redundancies and other relevant factors forCBRE DATA CENTER SOLUTIONS 2018 CBRE, Inc.4NORTH AMERICAN DATA CENTER OUTLOOK 2019
DATA CENTER OUTLOOKW HAT TO WATC H Hyperscale cloud providers. Will hyperscale cloud provider Enterprise data centers. Will enterprise clients continue todemand continue to outpace supply in 2019?sell or reduce their footprint in data center assets they ownas they migrate to Hybrid IT solutions? New technologies. What will be the impacts of 5G,blockchain and edge computing on demand in primary Economic slowdown. How would a potential economicand secondary markets?slowdown and rising interest rates affect the data centersector?CBRE DATA CENTER SOLUTIONS 2018 CBRE, Inc.5NORTH AMERICAN DATA CENTER OUTLOOK 2019
CONTACTSABOU T THI S RE P OR TPat LynchJeff WestMichael KaneSenior Managing DirectorHead of Data CenterSenior Research AnalystCBRE Data Center SolutionsResearch and AnalysisCBRE Data Center Solutions 1 303 628 1765 1 503 221 4806 1 303 264 ne@cbre.comKate PetersonMolly SacklesClient Services CoordinatorClient Services CoordinatorCBRE Data Center SolutionsCBRE Data Center Solutions 1 303 628 1731 1 303 583 sclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we havenot verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. Thisinformation is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior writtenpermission of CBRE.
CBRE Data Center Solutions 1 303 628 1731 kate.peterson@cbre.com Jeff West Head of Data Center Research and Analysis 1 503 221 4806 jeff.west@cbre.com Molly Sackles Client Services Coordinator CBRE Data Center Solutions 1 303 583 2048 molly.sackles@cbre.com Michael Kane Senior Research Analyst CBRE Data Center Solutions 1 303 264 1913 .
