Intelligent Investment


North America Data Center Trends H1 2023

September 6, 2023 4 Minute Read


Colocation Insights

  • Demand for wholesale colocation resulted in 36 MW of preleasing in H1 2023.
  • There are multiple larger inquiries for 50- to 100-MW land sites for wholesale and hyperscale development.
  • Pricing for transactions under 500 kW are increasing, alongside annual valuation increases of 3% to 5% due to expected inflationary costs.
  • AI continues to generate buzz, but no major leasing transactions have been announced so far in 2023.

Market Trends

  • There are few transactions for greenfield development due to scarce land and power supply.
  • Supply chain issues are complicating space and power delivery time frames, delaying commitments.
  • Toronto has at least three times more active construction projects than any other North American city.

Notable Activity

  • Stratcap Data Centers and Grain Management purchased a 126,000 sq. ft. data center in Brampton that will be expanded to 27 MW and 215,000 sq. ft.
  • KDDI entered into a binding agreement to buy Allied REIT’s three data center assets in Toronto for $1.35 billion. The carrier hotel at 151 Front Street West comprises the majority of the value.
  • Yondr is proceeding with its land acquisition in Markham to build an approximately 25 MW data center with an anchor tenant.
  • Serverfarm is recapitalizing with Manulife, with the sale of its existing portfolio. This includes the almost fully leased facility at 300 Bartor Rd.

Figure 1: Market Development Information

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 2: Market Inventory and Vacancy

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 3: Market Fuel Mix

Source: Toronto Hydro.

Figure 4: Average Asking Rates

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

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