Dallas is No. 3 Among Global Data Center Markets, C&W Study Says

Cushman & Wakefield evaluated 1,162 data centers across 38 global markets in its just-released Data Center Market Comparison.

Data center

Dallas-Fort Worth has ranked third among 38 global markets and their 1,162 collective data centers in Cushman & Wakefield’s newly released global Data Center Market Comparison.

If you thought that data centers were just a niche investment and inflexible asset for global enterprise, think again, Cushman & Wakefield declares. Now, they are a cornerstone of the information economy. In the past decade, roughly $100 billion has poured into the asset class, according to report. 

What sets Dallas apart? Location and incentives.

“Dallas sits at the midpoint of several long-haul fiber networks and has long been a business-friendly location and infrastructure hub in the center of the country,” Rick Hughes, executive managing director in Cushman & Wakefield’s Dallas office, said in a news release. “In addition, the state of Texas maintains strong data center incentives, with sales tax exemptions available on large builds over $200 million.” 

Add to that the relatively low cost of land, low risk of natural disasters, and many locally based large enterprises, all of which has led to Dallas being a consistently strong market, even one that has battled retail pricing compression because of the pull power of large cloud services companies, C&W said in its study.

Dallas has large data centers under construction

Cushman & Wakefield said more than 80 MW is currently under construction throughout the Dallas market, with half of that as part of a major expansion at the Infomart in Dallas. Multiple large campuses remain in planning, and absorption has remained consistently solid over the past two years. 

Dallas-Fort Worth is home to several large data center companies: CyrusOne and DataBank in Dallas and NTT Data in Plano, for example. Facebook operates a massive data center in the AllianceTexas development of Fort Worth and Google is building a large facility in Midlothian.


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Cushman & Wakefield said the significant capital inflow to data centers globally has been matched by an equally major technical shift as enterprises have chosen to move workloads off premises, first to colocation facilities and more recently to a mixture of colocation and public and private clouds. That shift has caused the largest cloud platform providers—Amazon, Google, and Microsoft—to become the most influential players in many markets, altering data center sizing by a factor of 10.

Once impressive a decade ago, the 10-megawatt (MW) data center pales in comparison to the now common 30-MW leases.

“The speed with which the industry is shifting makes the creation of a data center strategy a complex and daunting task,” Dave Fanning, executive managing director and leader of Cushman & Wakefield’s Data Center Advisory Group, said. “Enterprises must determine what to do with their on-premises facility, which workloads to move to the cloud and how implement a hybrid IT strategy. Developers and operators require a parcel with robust fiber and access to power as well as a thorough grasp of the permitting process and all risk factors.”

He added that investors must be able to assess the long-term potential of a data center to hold its value and whether it can be upgraded easily. But, that involves an access to capital and a clear understanding of objectives.

Top three markets’ scores considerably outpaced the rest

In the study, each data center was scored across 12 weighted criteria.

In consideration of each market, the highest weight was given to cloud availability, fiber connectivity, and market size. Mid-weight considerations were development pipeline, government incentives, market vacancy, political stability and sustainability. Low-weight considerations included environmental risk, land prices, power costs, and taxes.   

C&W said for the top 10 markets—Northern Virginia, Silicon Valley, Dallas, Chicago, New York/New Jersey, Singapore, Amsterdam, Los Angeles, Seattle, and London—global leaders still rule the sector. Emerging markets such as Atlanta, Denver, Dublin, Las Vegas, Phoenix, Portland, Salt Lake City, Sydney, and Vancouver are compelling alternatives.

The study’s top three markets scored considerably higher than fourth place Chicago, with the next 12 markets separated by a final score of less than 10 percent. C&W said that proximity shows a shift toward key secondary areas quickly becoming primary markets globally.

Several European markets—most notably London, Paris, Milan, and Zurich—have gotten continued interest from international operators, with Europe becoming a new hyperscale target where power is available. In the U.S., large sites have recently been selling in emerging markets (Portland, Phoenix, and Atlanta), with these areas potentially offering significant savings over California or Northern Virginia.  

Markets in the Asia-Pacific—especially Sydney, Tokyo, Hong Kong, Beijing and Shanghai—also are expecting considerable growth in the next two to three years, with demand for greater connectivity and need for modernization of older assets necessary.

The top 15 global markets will thus remain extremely competitive for the foreseeable future. 

“The top markets provide the greatest number of options to the greatest number of perspectives,” Kevin Imboden, director of research for Cushman & Wakefield’s Data Center Advisory Group, said. “While one size sometimes does fit all, for certain specializations it’s important to review and understand the factors most important to the specific requirement and aim accordingly. Combined with those markets that have been overlooked and underutilized, there is great potential for niche development and secondary markets across the globe.” 

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