Whilst there is always a possibility one of the sectors below might acquire their own site, the evidence that occupiers are moving back to a capex option is limited. It is likely that the providers outlined above will need to secure a commitment from the sectors below and we have provided a summary on each of these sectors:
7.4.1 Managed Services Occupiers (including Integrators eg IBM)
• Offer managed IT solutions on an individual rack or small private suite basis (by Contract, not Lease)
• Size of requirements vary considerably, but typically smaller than Hosting (at least initially)
• Customers usually require space immediately
• 6-12 months lead in time optimum
• Requirements often customer/contract driven
• Will commit to long leases (10-15 years) although require flexible alienation/alteration provisions
• Improving demand
• Will require certainty on possession to start fit out 7.4.2 Telecommunication Occupiers
• Demand increasing
• Now widening IT offer to include hosting and managed services
• Requirements generally customer driven
• Technical requirements (for pure Telecom uses) often unusual, and quite often lower power requirement
• More likely to take a fixed area, and not to anticipate growth or request options.
7.4.3 Corporate Occupiers (inc. Banks)
• Very difficult to predict occupier requirements, especially outside of mainstream areas
• Any decision usually based on a long term strategy, usually 12 – 24 months (plus)
• Will commit to long leases (15-20 years)
• Good covenants
• Current (and anticipated) reduced demand although increased outsourcing activity (often Capex restricted).
These requirements are currently more likely to appear through Integrators or Managed Services operators
• Net technical requirements various , but in this case assume 5 - 20,000 sq ft 7.4.4 Public Sector and Education
• Tend to outsource strategic IT initiatives – NHS to BT/CSC, MOD to EDS/Fujitsu
• Universities tend to operate their data centre on campus
• Sensitive sectors will not share sites and outsource to List X operators only
• Regional and Local Authorities requirements tend to number in racks between 30 -100 cabinets
• Regional and Local Authorities outsource to retail sector
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8 Recommendations
Having reviewed the five sites identified by Fife Council we consider that three of the sites have the potential for data centre use. These are; The Lexmark Facility, Rosyth, the Tullis Russell site, Glenrothes and the Westfield Development Centre, Cardenden.
At present it is our recommendation that even though the two plots at the Tullis Russell site do not suit a data centre development due to the reasons previously mentioned, present construction and the times scales that have been proposed for the bio mass plant places the area within the vicinity of Tullis Russell in an advantageous position if further development land is identified. This land could either be on the Tullis Russell site itself or within close proximity.
The tangible benefit of a development, in this case, the bio mass plant having begun construction can not be underestimated when attempting to attract Data Centre Real Estate Providers to the idea of constructing a data centre in Fife.
We believe that out of the three sites identified, one site should be selected as Fife could not sustain more than one data centre in the present market conditions. Further detailed due diligence should be undertaken on the selected site concentrating on the availability of power, fibre and planning.
Once a site becomes an “enabled site” (power, planning, fibre) it would then be advisable to enter into discussions with an established Data Centre Real Estate Provider who continue to service occupiers requirements by providing an operational expenditure option for their clients data centre needs. This approach will add weight to attracting an anchor tenant in conjunction with the support of local and national government should be pursued.
On the back of securing an anchor tenant, a real estate provider will commence the construction and fit out of a data centre. This approach to the development will add credence to a data centre project in Fife and will subsequently make the attraction of further tenants a more simple process. This process should be seen as a long term plan which we envisage will take up to five years to come to fruition.
Our recommendations can be summarised as follows;
• Although three sites work, only one site to be pursued as Fife could not sustain three data centres
• Once a site is identified, power, planning and fibre reports (Connectivity Study) to be produced
• Once an “enabled site” completed, enter in to discussions with possible third party real estate providers
• Fife Council to enter partnership with Real Estate Provider to attract anchor tenant
• Consultation with regional and local government to be undertaken to establish all incentives available
• Marketing report to be published for data centre operators concentrating on the benefits of Fife rather than highlighting any negative impacts contained within this report
COPYRIGHT © JONES LANG LASALLE IP, INC. 2011. All Rights Reserved 45
9 Conclusion
With Fife Councils aim to become Scotland’s leading region for renewable energy, five sites had been selected to ascertain their suitability for data centre use. Following the due diligence process undertaken by the Jones Lang LaSalle Data Centre Advisory Group, three feasible sites were highlighted as possible sites for a Data Centre; The Lexmark Facility, Rosyth, the Tullis Russell, Glenrothes, and the Westfield Development Centre, Cardenden,.
The Tullis Russell site is seen as the most advantageously suited if further development land either becomes available on the site or within Glenrothes, this is fundamentally due to the construction of the bio mass plant that is taking place. This site is in-keeping with Fife Councils vision of renewable energy being provided to industries such as data centres who require large amounts of energy for operational needs.
At present approximately 80% of data centre transactions occur in the south east of England, this can be attributed to fibre synchronicity to the City of London. There are a number of data centre operators who have and continue to obtain data centre space outside of the traditional data centre market of the south east of England. Contributing factors to this continuing growth outside of the south east of England include, a shortage of power, a lack of suitable sites, technical advancements, improved fibre connectivity and the need for data storage rather than synchronicity to the City of London.
With the potential for Fife to provide lower ambient temperatures, potential for free cooling and therefore reduced running costs, Fife Councils vision of supporting green energy and the potential Carbon Reduction Commitment savings for a data centre operator, along with the support of Fife Council and Regional Government, could make Fife a realistic alternative as a data centre location outside of the south east of England.
Although there are a number of positive opportunities and reasons for Fife to become a location for a data centre, the perceived risks by any data centre operator should not be overlooked. Fife is unique in the UK due to its green energy credentials and free cooling, but not unique in Scotland. Fife also does not have a proven track record as a data centre location. This though may be nullified by the impending land acquisition by Lloyds Banking Group at Internet Villages International (IVI) at Ecclefechan, which could give credence to Scotland as a data centre location and subsequently Fife.
As highlighted in our recommendations we believe that a strategy should be pursued in partnership with a data centre real estate provider in an attempt to attract an anchor tenant and further tenants to an area of the UK which although untested has a number of attractive propositions for a data centre operator. This strategy should be seen as a three to five year plan.
JONES LANG LASALLE January 2011
Appendix 1 – Site Images
David Willcocks Director 8 The Square Stockley Park Uxbridge UB11 1FW
+ 44 (0)20 7399 5294 [email protected]
Oliver Quinn Surveyor 8 The Square Stockley Park Uxbridge UB11 1FW
+ 44 (0)20 7399 5721 [email protected]
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