Tuesday, 16 August 2016

The Rise of the Build-to-Suit Cloud Data Center

Cloud computing is changing data center development, with action now shifting to a build-to-suit model in which cloud builders pre-lease entire buildings for themselves, representing 12 megawatts or more of new capacity. Wholesale data center providers, who have previously built multi-tenant buildings and leased them one data hall at a time, are adapting their model to accommodate the build-to-suit demand.

In the latest example, CyrusOne has just acquired a building in Northern Virginia, which has already been fully leased to a hyperscale data center customer. The 130,000 square foot building will provide 12 megawatts of IT capacity for the fast-growing cloud provider.

“Within just over a month, we were able to quickly identify a solution and purchase a new shell building within a highly constrained market,” said Kevin Timmons, Chief Technology Officer for CyrusOne.

It’s the latest in a series of recent “super-wholesale” deals where tenants have leased between 16 and 22 megawatts of space, some of the largest leases in the history of the multi-tenant data center industry. Several major cloud platforms are seeking even bigger deals of 25 megawatts or more, according to a recent report from Jim Kerrigan of North American Data Centers.

Trend With Benefits for REITs

It’s a trend with benefits for the publicly-held data center REITs (real estate investment trusts), who are positioned to do larger deals to construct data centers that are pre-leased, which are less risky and easier to finance.

“We are seeing a significant change in customer buying behavior, as more and more Internet scale companies are approaching us to do build-to-suit projects for them,” said Gary Wojtaszek, CEO of CyrusOne, which has been perhaps the leading beneficiary of this trend. “About 95 percent of our capital this year is being allocated towards pre-sold projects, which is the highest level we’ve ever had. This is like just a phenomenal position to be in.

Read More@ http://datacenterfrontier.com/rise-build-suit-cloud-data-center/

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