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Data Center Activity Simmers While Construction Remains Hot

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Data center leasing activity cooled moderately in the first half of the year compared to last year's boom, while construction and development activity continued to rise.

Data center

Data center construction has increased 43% since 2016. In North America, about 506 megawatts of capacity was under construction as of Q2, up 353 megawatts compared to last year.

Experts are attributing the slight pullback in leasing activity to large cloud providers' taking time to occupy and utilize the enormous amounts of space leased last year, GlobeSt reports.

This cooldown is not projected to last long. Demand from large enterprises in the tech, healthcare, telecom and banking fields means absorption of data center inventory should pick up again over the second half of 2017, even if cloud providers continue to take a break, Data Center Knowledge reports. The biggest leases signed within the first half of the year occurred in Northern Virginia, Toronto and Dallas-Fort Worth, JLL reports.