The Spanish data centre segment is advancing fast towards its consolidation, especially following companies’ digital transformation acceleration caused by the pandemic. This has generated a greater need from companies to have a volume of information hosted in specialised centres. This is the opinion of Frank Knight’s data centre expert team within its «Data Centre EMEA», an analysis which had already been highlighting Madrid and other areas of influence as market at its peak, since the previous edition.
More than ten years ago, the data centre percussors in Spain, amongst which were Interxion and Global Switch, played an important role in the country, supported by the banking sector demand. Despite the 2008 financial crisis, which affected in particular the banking activity, the segment was recently significantly reactivated.
The Spanish market keeps growing and attracting new companies, especially public services’ providers in the American Cloud and other international wholesale operators.
Since 2017, Madrid has received an increasingly larger interest from these international companies, initially with the purchase of ITConic interconnectivity company Equinix. This operation was followed in 2019 by the acquisition by Asterion Industrial Partner of the majority of data centres owned by Telefónica to create brand Nabiax. This transaction included Alcalá, currently the centre with the highest capacity in Spain.
Currently, the largest development in Spain is the construction of a new three data centre campus in Aragon by Amazon Web Services. Each of these data centres willn have more than 100 MW of power. This project has turned Spain into the fastest growing market within this segment in Europe. Google and Microsoft also confirmed their predictions of opening new cloud regions within the country, which led to an increase in the development of these assets.
«During the last 12 months, Madrid has become a key market in Europe for data centre operators and institutional investors, supported by the lack of offer for level 3 or higher data centres by the excellent fibre optic connectivity the city has», stated James Cowper-Coles, associate logistics capital markets at Knight Frank.
Thus, for example, during the second quarter of 2020, Interxion, owned by Digital Realty, acquired a terrain for the construction of what will be largest placement data centre in Spain, with a 34MW IT load.
NTT announced by the end of 2020 it was at the initial stages of developing a 6MW data centre in Las Rozas. So, at the moment, the Spanish capital’s market has a significant amount of new data suppliers being built or, at least, under planification. Global Switch also added 4MW during this period, intensifying its data rooms in Madrid during the third quarter and increasing the total offer.
The market maintained its rising trajectory during the year’s third quarter, with an absorption which increased 12 MW between July and September, boosted by the important deployments of Nabiax and Equinix, by concluding their leasing contracts través.
It is thus expected that the total volume of data centres in Spain will be multiplied by six from the 87MW currently built capacity to more than 500MW. This will be generated, in great part, by the campus Amazon is building in Aragon.
As shown by Frank Knight’s Data Centre experts in their report, for the future, we need to take into account that several leasing pre-contracts were not fulfilled and, as such, absorption will grow to meet the needs of new public cloud regions. It is also estimated there will be a second hyper-scale development round by the end of this year.