Multi-Tenant Datacenter Supply 2010 Mid-Year Update

Analyst report by 451 Research, published on 9/23/2010

The Multi-Tenant Datacenter Supply Mid-Year Update Report 2010 gives readers an overview of the multi-tenant datacenter market. Single-user enterprise datacenters, single-tenant datacenters and carrier hotels are specifically excluded from this analysis, although colocation and hosting facilities that lease space in carrier hotels are included.
Additions to this report from previous versions include an analysis of M&A opportunities, IPO activity and additional color with respect to capital entering the sector to fuel more datacenter build projects. Additionally, each geographical market/metropolitan area includes snapshots of population and major businesses in the area, as well as a quantifiable market size of the multi-tenant datacenter providers in the area. Our 2010 report at the beginning of the year included Europe in lieu of the Asia-Pacific region, which this report revisits. Future reports will alternate between Asia-Pacific and European datacenter markets.
The multi-tenant datacenter supply picture remains mostly the same from the last report, which is to say, highly constrained. The picture has worsened somewhat, however, with demand outpacing supply more than was projected in the first part of 2010, mainly from the continued stalling of the construction pipeline and the financing available for additional builds. The supply/demand dynamic continues to be lopsided, causing utilization to climb and availability to decline.
There is little doubt that we are now seeing the beginning of the end of the recession and the credit crunch. The sector has performed exceptionally well; this performance will help the case for Internet infrastructure companies seeking credit in the future. Many projects have been restarted that were put on hold previously – a trend that is expected to continue. This is not to suggest, however, that debt is immediately available to any up-and-coming datacenter provider that desires it. Debt is still being limited to those companies with proven track records and is not given out to speculative builders. This lending discipline will continue, and as such an oversupply situation is not expected in any of the top major markets outlined in this report in the near term.

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