Locations of special interest

The largest concentration of data centres in the UK is around the M25 and south east. Growth of data centres in this region developed from telecoms deregulation in the mid 1990’s. From this, demand for data centre services registered sharp increase as newly formed telecoms providers and IT companies competed for market positioning. Since then, the need for synchronous replication of operational data and the proliferation of low latency applications has meant that the south east region has remained a target of consistent demand. Today the south east, and in particular the Greater London market, is the largest data centre market in Europe and the second largest globally.

Within this cluster, the richest vein of data centres is within the boundaries of the Thames Valley region, specifically along the M4 corridor. It is little surprise therefore that this area has a high concentration of firms from a technology background. The TMT sector accounts for close to a third of office take-up here over the past 20 years.

Closer inspection reveals Slough & West London as the largest submarket within this catchment and one of particular importance. Some 45 data centres are live boasting 342MW of built IT power and 88MW under development². This means that Slough and West London account for 42% of data centre capacity. Many of these data centres are located at Slough Trading Estate which is an essential component of the London Internet Exchange (LINX) and serves as a connectivity pathway to the rest of the UK and overseas locations. The growth of the Slough market though has reduced the availability of substantive high voltage electrical power in the area. This has meant that the UK National Grid has needed to commit to building a new 400kv substation (the largest size substations in the UK).

The ever-widening reach of technology into all aspects of everyday life will only sustain demand for data centres and locations of strong connectivity such as the south east. For businesses, many products and services rely on robust and secure connections. Within the media and data world for example, this need is rapidly gaining in criticality, with latency an aspect of particular consideration for services such as content streaming. The closer a business is to a data centre, the quicker it will receive or relay information to customers.

The pandemic has also highlighted to all businesses the importance of robust IT infrastructure. Local and national lockdowns forced an unprecedented upturn in demand for digital services to maintain some sort of business operation. For some, the switch to online has meant business survival. 

Digital resilience and agility therefore will undoubtedly be a key area of businesses investment moving forward as ‘just in case’ strategies emerge. Conservative estimates suggest that digital transformation spending is expected to rise by more than 10% in 2021 despite tightening budgets. The demands on data centres therefore, will clearly continue to increase in support of this. As greater onus and investment is realised from businesses the high concentration of data centres in the south east will continue to serve as significant pull factor for the region.

Ref: 1 ONS 2 DC Bytes/Knight Frank

Stephen Beard

Partner, Global Co Head of Data Centres

stephen.beard@knightfrank.com

Darren Mansfield

Partner, Commercial Research

darren.mansfield@knightfrank.com