Data Center Outlook
Increasing investor interest, sustainability efforts and compressed pricing among the top themes to impact the data center industry in 2020
Cloud adaptation accelerates and data center REITs outperform office and retail according to JLL’s Data Center Year-end report. The strong demand recorded in the first half of the year continued to year end with increased cloud activity across data center markets in the United States. According to JLL’s latest Data Center Year-end report, US markets finished the year strong with 349.6 MW of total absorption in 2019.
JLL identified three key themes expected to impact the data center industry in 2020
- Data center REITs closed 2019 with a strong performance and are poised for healthy 2020: Accelerated growth in consumer and commercial data usage and digital content continue to drive positive investor sentiment.
- Data centers going green: Sustainability and green initiatives are growing mandates for businesses across the globe and in commercial real estate, especially in data centers. While it is not intuitive to think about the carbon footprint of data, it lives in data center facilities where massive amounts of power are consumed.
- Prices compressed in markets across the United States in 2019: This trend is driven by more providers entering the markets, large megawatt deals executed at lower rates and robust supply pipelines.
With plenty of megawatts under construction and much planned, we expect rates to continue its downward trend in the United States. The provider competition is driving conditions to be more favorable for the data center’s end users.
Download JLL’s latest Data Center Year-end report for more insights on the data center industry’s performance.