Driven primarily by in-market expansions by local Fortune 1000 companies Minneapolis saw 2.3 megawatts (MW) of net absorption in H1 2019 according to CBRE’s latest U.S. Data Center Trends Report, up 1.5 MW from the same period a year earlier.
The market’s total inventory grew 1.5 MW year-over-year to 51.1 MW. Despite the new supply, the market‘s vacancy rate dropped 160 basis points year-over-year to 32.7 percent.
“Both urban and suburban colocation sites are seeing an increase in activity for different reasons and similar requirements,” said CBRE’s Dan Peterson, vice president, Data Center Solutions. “Service providers have reason to be positive about market balance and that we are getting past the glut as we hit the second half of 2019.”
The seven primary U.S. data center markets saw 171 megawatts (MW) of net absorption in H1 2019, nearly 57 percent of 2018’s full-year record. That absorption nearly eclipsed the 200 MW of capacity added in H1. Northern Virginia, the largest data center market in the world, accounted for 74 percent of net absorption in the primary markets.
“Enterprise users have adopted hybrid colocation strategies as they seek more business, real estate and IT agility,” said Pat Lynch, senior managing director, Data Center Solutions, CBRE. “This has led them to seek facilities that offer more than just competitive rental rates, including multi-cloud access and dense connectivity. We expect strong demand for space in facilities with interconnectivity and flexibility to continue, and for providers to adapt their construction plans and deal structures to keep pace with this need.”
Northern Virginia remained the most active data center market, with net absorption of 126.4 MW in H1 2019.
Top 10 Most-Active Markets:
|Market||H1 2019 Absorption||Market||H1 2019 Absorption|
|Northern Virginia||126.4 MW||Phoenix||6.0 MW|
|Houston||14.4 MW||Southern California||5.8 MW|
|Silicon Valley||13.7 MW||Chicago||4.8 MW|
|Dallas-Fort Worth||11.2 MW||Charlotte/Raleigh||3.2 MW|
|New York Tri-State||6.3 MW||Minneapolis||2.3 MW|
Strong demand has resulted in more than 411 MW of capacity under development nationwide, in addition to the nearly 200 MW delivered in H1 2019. Northern Virginia accounts for 60 percent (248.7 MW) of the current construction activity in the primary markets, largely due to large requirements from cloud users.
Other markets with significant construction activity include Phoenix, with 66.6 MW under construction as of H1 2019; Dallas-Fort Worth (34.6 MW); Silicon Valley (30.8 MW) and Atlanta (14.5 MW).