Montreal’s data centres experienced 17.3 megawatts (MW) of new absorption in the first six months of 2017, ranking the city as the fifth most active among 18 North American markets JLL monitors. Toronto sits midway on the list with 14.3 MW of absorption, while the conglomeration of Vancouver and Calgary, categorized as western Canada, was well off the pace with 3.5 MW of new absorption.
JLL analysts attribute Montreal’s healthy status to low electricity rates — an average of 4 cents per kilowatt-hour (kWh) in the first half of the year — and the arrival of “big-name cloud providers”. There is still 44 MW of untapped potential in an existing inventory of 131 MW, while an additional 30 MW is under construction. Rental rates fall in the range of USD $250 to $460 per kW (CAD $315 to $580) for users with a demand load greater than 250 kW.
Cloud providers account for about 50 per cent of the new data centre demand in Montreal, whereas Toronto exhibits a much more even split with cloud, technology, banking/financial services and entertainment/media each representing a 20 per cent share of absorption. “Toronto’s place as the centre of business in Canada continues to provide a safe haven for mission-critical infrastructure; however, the demand and supply economics certainly favour end-users,” JLL’s Data Center Outlook reports.
Current vacant inventory could accommodate 70 MW of additional load. Another 62 MW is under construction, which will augment Toronto’s current total inventory of 193 MW. Rental rates are pegged in the range of USD $200 to $700 (CAD $250 to $880) per kW, in part reflecting an average electricity rate of 11.2 cents per/kWh thus far in 2017.
Looking west, the data centre story is much the same as commercial real estate in general.
“Calgary is facing a struggling local economy as well as minimal incentives being offered to users. No new projects are expected as operators work to fill vacancies within existing portfolios,” JLL reports. “Conversely, supply is low in Vancouver with every operator at or near capacity. Yet, in a market performing extremely well, only one expansion is anticipated due to the high cost of building.”
Together, the two cities offer a total inventory of 84 MW, with 10.65 MW of that currently unexploited. Vancouver’s in-progress expansion will add another 3 MW of capacity. Rental rates for users with a 250+ kW load are pegged at USD $400 to $500 (CAD $500 to $630) per kW.
Broader industry trends hold sway in all markets. “Data centre users are investing in systems that will allow them to use their servers more efficiently and effectively. Essential technological advancements like artificial intelligence to anticipate failures and automation to reduce response time are what the industry needs to keep up with today’s digital consumer,” says Mark Bauer, JLL’s data centre solutions market director.