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London data centres hit by credit crunch
Banks shunning the capital

By Nick Heath

Published: Friday 04 July 2008

London's data centre sector has suffered a downturn, with no corporates taking up space in the capital this year.

Businesses chose London for just four per cent of the data centre space taken up across Europe in the first quarter of this year, according to real estate advisor CB Richard Ellis.

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Uncertainty in the financial sector is blamed for the sluggish uptake, with CB Richard Ellis saying it had made IT budgets unclear.

It found that not one bank or law firm chose to take up space in London, with new space split roughly two-thirds retail and one-third technology.

Andrew Jay, head of technology practice group at CB Richard Ellis, said in a statement: "This has been the lowest quarter for take-up in London since the emergence of the corporate market in 2004.

"London has been significantly affected by the current financial climate due to the large number of financial services companies in the market.

"Although quarter one take-up has been low, there are a number of large deals that will come to fruition in 2008 and while we will not see the same levels of take-up as last year, which was a record-breaking year, we do expect levels to exceed those of 2005 and 2006."

Total data centre space take-up for Europe during the quarter was 18,620 square metres, a decrease on the previous quarter of 64 per cent.

Space taken up in the rest of Europe was split 61 per cent in Frankfurt, 28 per cent in Paris, four per cent in Madrid and three per cent in Amsterdam.