Recent research predicts data centre space in London will increase by around 45% through to 2012.

But the fact that London is approaching full utilisation does not detract from the fact that it is the most promising market in Europe, by size and activity said the consultancy that commissioned the research, BroadGroup.

The new report, ‘European Data Centres II’ to be published at the March Data Centres Europe event identifies new outside investors who are entering the UK and other markets, and are prepared to take larger risks on development.

Other factors impacting the London data centre market be a likely migration towards cheap power locations, due to carbon-neutral facilities and cheap renewable power acting as new drivers, particularly if directives mooted by the General London Assembly to impose greater environmental controls on businesses come in to force.

Potential data centre opportunities in central and eastern Europe may become a more popular option, said Keith Breed, BroadGroup research director. “The region remains an opportunity, but current stock appears to lack scale and needs investment and modernisation. Most of the data centres in the region are being used for offshoring and based on a self-build model, often with a contact centre development attached.”

It also found that telcos too are seeing the need to re-invest in space to ensure that they are fit for purpose; at present many are simply node/TDM sites.

Much of the next phase of data centre growth will be driven by demand from systems integrators and corporate customers who are facing their own data centres reaching saturation. The UK Data Centres report identified the lack of new sites and increasing challenges and regulatory involvement in power and cooling issues, which is making corporates far more willing to outsource. There are also specific market segments that absolutely need to use a third party, with the online gaming and gambling companies the most obvious example.