Strong Fundamentals Lead to Record-Setting Investment in Data Centers

  • Investment in data center real estate reached a fever pitch in the first half of 2017.
  • Absorption was subdued, as hyperscale cloud users stayed on the sidelines in H1, as they digested last year’s enormous leasing volume.
  • Proximity and access to cloud services and latency-sensitive interconnection nodes to existing networks are still the strongest drivers of retail/colocation requirements for enterprise users.
  • National pricing standardization of rental rates continues to emerge, where variability in pricing is dictated more by the need and type of requirement versus geography or market location.
  • There is a higher tolerance for speculative data center development as providers become more comfortable with the strength of their sales pipeline and the transparency of user expansion goals.