We all have different challenges when it comes to COVID-19, and the measures we must to take to try and quell the impact of the virus differ for every part of the data centre sector. Your number-one concern could be to keep the ‘lights on’, or catering to customers seeing rising demand, dealing with tricky enterprise renewals, getting supply chains in place, or trying to find ways to invest in the data centre sector which has, despite some challenges, fared well during the pandemic. There are many moving parts, and this has been emphasised throughout Q3. There are also many anomalies, which is making it even more difficult to predict industry movements on a quarter-by-quarter basis.
Digital Realty’s William A Stein voiced my own concerns in Digital Realty’s Q3 earnings when he said: “While we have not experienced any significant business disruptions from the COVID-19 pandemic to date, we cannot predict what impact the COVID-19 pandemic may have on our future.” He was referring specifically to financial conditions, results of operations or cash flows. For me, it is looking at supply and demand.
We now have insight into 128MW of supply that was due to come online in 2020 but didn’t due to COVID. This 128MW is now being pushed out to 2021. On top of this, we know of another 270MW that is already scheduled to come online next quarter. This could make 2021 a record year! What we cannot say with certainty, however, is that all of this supply will be able to come online, even if providers are becoming so much better at securing their supply chain, operating remotely, getting customers around sites virtually and are definitely provisioning with an emphasis on longer-term demand.
The real standout figure for me from our Q3 results, however, is one that is not – as yet – impacted by COVID. We already have line-of-site of more than 400MW of supply scheduled to come online in 2022. This is projects we are confident are being planned. And we can say we expect this figure will grow through Q4 and into 2021. This is phenomenal growth, and one we think that no doubt will emphasise the role the data centre industry is having – not only due to COVID but in enabling digital transformation across our businesses, cities and personal lives. It is certainly interesting times.
Our Q3 European Data Centres report provides much more insight into these figures and covers some of the market dynamics we are seeing as a result of COVID-19. We also place a spotlight on Zurich – another market where we are seeing high growth - and uncover Equinix’s new baremetal server offering – Equinix Metal. In the coming weeks, CBRE will also release its first weekly newsletter where we will highlight our upcoming events, industry news and provide insight into what we are hearing throughout the quarter.