CW Data Center Global Market Comparison 2020

L o w M i d H i g h

LAND PRICE

CATEGORY WEIGHT

As the desire for larger, denser and more scalable data center campuses grows, land availability is becoming an increasing issue for data center developers and operators. A proper site for a successful data center development includes many considerations discussed in this report, including access to fiber, proximity to a substation, a strong and affordable power grid, and available incentives. There are more prosaic real estate concerns too, as in sites certain markets are often available in sizes under three hectares (Hong Kong, Singapore) or are just emerging as data center locations (Salt Lake City, Las Vegas, Portland). Smaller sites often lead to more expensive builds, with multiple levels and higher density being required both for efficiency and to meet customer size requirements. As in the case in other real estate categories, demand for land is affected by other factors besides physical scarcity. Ease of permitting, zoning or use restrictions, population density, and vendor ecosystem all factor into land acquisition, along with proximity to availability zones of major cloud services providers.

For the markets reviewed, those with the lowest cost of land are in secondary data center markets with low density or geographic restrictions, primarily in the United States. While it may not be surprising that Atlanta, Columbus or Denver have affordable pricing, land in top U.S. data center markets such as Phoenix, Dallas, and Northern Virginia remains half the price of Canadian markets and a tiny fraction of deeply constrained markets in Western Europe or Asia. Large sites in these markets can thus expect to trade at premium pricing, as new operators enter and others expand.

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