LONDON, February 23, 2012 /PRNewswire/ --
- Independent research sponsored by Digital Realty reveals need for additional data centre space, despite economic uncertainty
Digital Realty Trust, Inc. (NYSE: DLR), a leading global provider of data centre solutions, today announced the latest findings of its annual European market survey.
The independent survey, undertaken on behalf of Digital Realty by research firm Campos, interviewed over 200 senior decision-makers at European businesses with annual revenues of at least 500 million pounds Sterling across six countries regarding their organisation's plans to add to their data centre infrastructure. Those interviewed were Executives or Senior Management in IT, Finance or Real Estate with responsibility for either the procurement or operations of their company's data centres.
The survey revealed an increase in the number of organisations planning to add new data centre space. Eighty-five percent of respondents intend to expand their resources in the next year, compared to 82 percent at the end of 2010. In addition, the responses indicate a growing need for new facilities, with respondents now requiring an extra 15,600 square feet of space on average compared to 14,500 square feet in 2011. Just over half of organisations surveyed (51 percent) intend to spread this across at least two new sites.
Despite highlighting the increased demand for space, the results also suggest growing uncertainty in the face of the economic difficulties impacting the euro zone and other markets. Of those companies planning to expand their data centre assets over the coming year, 23 percent assert this will 'definitely' take place - down from the 25 percent who were certain they would expand in 2011. The remaining 62 percent say they will 'probably' add new facilities in 2012.
Other key findings from the research include:
- Demand for new data centres is highest among UK and Spanish businesses (35 percent and 32 percent), with the French and Dutch companies displaying the lowest interest in expansion (14 percent and 12 percent)
- For over two-thirds (69 percent) of organisations, the priority is to add facilities within their local market
- Established business centres remain the most popular location for situating a new data centre, with London (31 percent), Paris (26 percent) and Frankfurt (18 percent) the top choices
- Despite concerns that rising local taxes will disincentivise investment in new data centres, operational considerations remain a priority when determining the suitability of a location: site availability, security, connectivity and accessibility to local staff were all listed as priorities over regional charges
Using a partner
When asked about their approach to developing new data centre facilities, over half (59 percent) of businesses stated that they intend to seek assistance from a partner. The latest results show a significant rise in interest for leasing space from a dedicated provider, with 32 percent preferring this option - nearly double the response rate for 2010 (18 percent). Self-build projects - with or without a partner - are also gaining in popularity, with 42 percent now planning to develop their own facilities compared to 30 percent a year ago.
When assessing the suitability of a potential partner, concerns about turbulence in the markets are driving European businesses to seek stability. When asked about their requirements for a partner, respondents listed the ability to maintain fixed costs and financial resilience as the most important considerations, with the extensiveness of the partner's offering also a valued factor.
The survey also revealed encouraging signs that organisations are making greater efforts to improve the efficiency of their existing data centres, with a greater proportion aware of the power usage effectiveness (PUE) of their facilities. Only 12 percent of respondents admitted not having access to this information, against 18 percent in last year's survey. The results also show an increase in companies actively monitoring their power consumption: almost three-quarters (73 percent) now do so, compared to 68 percent in 2011.
In a related response, the average PUE rating reported has fallen from an average of 2.66 to 2.61. Average power density has also declined, from 5.5kW per rack in 2011 to 5.3kW in the latest survey. However, there are indications this may increase in the coming year, with organisations predicting a need for more power-intensive racks in their new facilities, with an average forecasted requirement of 5.7kW.
Commenting on the findings, Adam Levine, VP Sales, Europe, at Digital Realty said: "The latest research confirms what we see in the market: that demand for data centre space in Europe has not abated. However the decision-making process for procuring additional data centre space is lengthening as businesses are obviously wary of committing to such a substantial investment given the current challenges facing euro zone countries and their trading partners. We see this reflected in their priorities when it comes to choosing a partner to support a new data centre project, with the ability to commit to a pre-determined budget and financial stability the top two considerations when making this decision.
"The results underpin the need for an informed, experienced approach to planning and developing a new data centre in order to minimise the potential risks involved. With a track record of building and operating hundreds of data centre facilities across the globe and a strong financial position, we feel Digital Realty remains best placed to support European businesses as they make their way through the current economic unrest."
Research commissioned by Digital Realty and carried out independently by Campos Inc between 24 October and 3 November 2011. 201 respondents participated from large companies with at least euro 500M/ 500M pounds Sterling annual revenues or 2,000+ employees (for Ireland and Netherlands, euro 250M/ 250M pounds Sterling annual revenues or 1,000+ employees) and headquartered in the UK, France, Germany, Netherlands, Spain or Ireland. Participants are responsible for managing a data centre, contract execution for or implementing a new data centre or expanding existing data centres within their organisation.
About Digital Realty
Digital Realty Trust, Inc. focuses on delivering customer driven data centre solutions by providing secure, reliable and cost effective facilities that meet each customer's unique needs. Digital Realty's customers include domestic and international companies across multiple industry verticals ranging from information technology and Internet enterprises, to manufacturing and financial services. Digital Realty's 101 properties, excluding three properties held as investments in unconsolidated joint ventures, comprise approximately 18.3 million square feet (1.7 million square meters) as of 17 February 2012, including 2.4 million square feet (222,000 square meters) of space held for redevelopment. Digital Realty's portfolio is located in 31 markets throughout Europe, North America, Singapore and Australia. Additional information about Digital Realty is included in the Company Overview, which is available on the Investors page of Digital Realty's website at http://www.digitalrealty.com.
Safe Harbor Statement
This press release contains forward-looking statements which are based on Digital Realty Trust, Inc.'s current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, among others, the following: the impact of the recent deterioration in global economic, credit and market conditions including the downgrading of the U.S. government's credit rating; current local economic conditions in its geographic markets; decreases in information technology spending, including as a result of economic slowdowns or recession; adverse economic or real estate developments in its industry or the industry sectors that it sells to (including risks relating to decreasing real estate valuations and impairment charges); its dependence upon significant tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; defaults on or non-renewal of leases by tenants; its failure to obtain necessary debt and equity financing; increased interest rates and operating costs; risks associated with using debt to fund its business activities, including re-financing and interest rate risks, its failure to repay debt when due, adverse changes in its credit ratings or its breach of covenants or other terms contained in its loan facilities and agreements; financial market fluctuations; changes in foreign currency exchange rates; its inability to manage its growth effectively; difficulty acquiring or operating properties in foreign jurisdictions; its failure to successfully integrate and operate acquired or redeveloped properties; risks related to joint venture investments, including as a result of its lack of control of such investments; delays or unexpected costs in development or redevelopment of properties; decreased rental rates or increased vacancy rates; increased competition or available supply of data centre space; its inability to successfully develop and lease new properties and space held for redevelopment; difficulties in identifying properties to acquire and completing acquisitions; its inability to acquire off-market properties; its inability to comply with the rules and regulations applicable to reporting companies; its failure to maintain its status as a REIT; possible adverse changes to tax laws; restrictions on its ability to engage in certain business activities; environmental uncertainties and risks related to natural disasters; losses in excess of its insurance coverage; changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; and changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws and increases in real property tax rates. For a further list and description of such risks and uncertainties, see the reports and other filings by Digital Realty Trust, Inc. with the U.S. Securities and Exchange Commission, including Digital Realty Trust, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011. Digital Realty Trust, Inc. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For Additional Information: A. William Stein Pamela M. Garibaldi Adam Levine Chief Financial Officer Vice President, Vice President, Sales and Investor Relations and Digital Realty Trust, Inc. Chief Investment Officer Corporate Marketing +44-20-7954-9120 Digital Realty Trust, Inc. Digital Realty Trust, Inc. +1-415-738-6500 +1-415-738-6500
SOURCE Digital Realty Trust, Inc.