Data Centres: An Introduction to Key Market Participants, Prime Markets in Europe, Challenges and Emerging Trends

This commentary provides an introductory overview of data centres and the data centre market in Europe. Namely, we discuss key market participants of the industry, data centre leases, service level agreements (SLA), asset-specific qualities and technical specifications, primary and secondary data centre markets in Europe, challenges and emerging trends in the industry. We also discuss the relevant factors we take into consideration in our analysis of this asset type, such as the energy efficiency, quality of redundancy and connectivity of an asset, whether it is powered with renewable energy, and the track record of its operator, just to name a few.

Understanding the data centre market and evaluating these assets from a credit perspective requires keeping up to date with regulations, market practices and customer requirements which are all still evolving. "We observe that challenges around sustainability and energy delivery regulation may present a new demand environment for secondary markets with good connectivity", said Deniz Gokce, Senior Analyst of European Commercial Real Estate Ratings at Morningstar DBRS.