Large cloud service providers and social media companies are fuelling demand for North American data centres, as leasing reached record levels in 2021.
CBRE’s latest North American Data Center Trends Report shows that there was 493.4 megawatts (MW) of net absorption in the seven primary U.S. data centre markets last year. This represents a 31per cent increase over 2019’s then-record level, and up 50 per cent from 2020.
Montreal and Toronto markets remain unchanged in H2 2021, though they have 69.0 MW and 40.0 MW, respectively, under construction. This new construction is largely due to cloud service providers growing their presence in the Canadian markets. Montreal’s construction pipeline remained the same from H1, while Toronto’s grew by 35.0 MW in H2 2021. Future supply is 23.2 per cent pre-leased in Montreal and 77.5 per cent pre-leased in Toronto.
Calgary market buzz
Calgary is listed as the only Canadian market that is currently creating a “buzz” within the North American data centre world.
The city is said to benefit from its proximity to the West Coast, along with offering more affordable land costs than Vancouver, while growing the network connectivity serving that region of Canada. While Montreal and Toronto continue to see their markets grow, Calgary will see growth driven by its geography, low risk of natural disasters and the need for western expansion, CBRE forecasts.
More options for occupiers in North America in 2022
Overall, despite a 17 per cent year-over-year increase in primary-market inventory, vacancy fell to just 7.2 per cent. Occupiers in need of data centre capacity in markets with low vacancy are expected to have more options this year, with 727.6 MW of facilities under construction. However, 44 per cent of this space has been pre-leased.
“We expect continued strong data centre demand from cloud service providers and social media companies in 2022 as these firms race to build out their digital infrastructure to support demand for cloud services and metaverse and other digital communities,” said Pat Lynch, executive managing director, Data Center Solutions, CBRE. “We also anticipate increased appetite for highly connected colocation space from enterprise users, and pricing increases and longer lead times for available capacity in certain markets due to power constraints and supply chain challenges.”
