Both Polish and international companies are reporting a growing demand for modern data centres. While the availability of suitable development land in established Western European markets is shrinking, Poland still has a large pool of excellent and affordable sites meeting data centre requirements.
The growth of the data centre market is fueled by the ongoing business digitalization, the development of e-commerce, the Internet of Things across various sectors, the growing number of mobile apps and the rise of streaming platforms.
“Uninterrupted access to IT systems is strategically critical to business continuity for an increasing number of companies requiring secure and non-stop access to network infrastructure and servers. As a result, high-quality ICT infrastructure continues to gain in importance,” says Natalia Mika, Advisor, Newmark Polska.
Poland is ready for data centre development
Data centre development has so far focused on the established FLAP-D markets of Frankfurt, London, Amsterdam, Paris and Dublin, and in the United States. “However, as the pace of digital transformation and development of cloud technologies accelerates and the data centre sector continues to grow at speed, the availability of suitable land in the FLAP-D markets is shrinking and Poland is seeing more and more data centre enquiries. Our country still has excellent and affordable sites and suitable fibre connectivity which is one of the key requirements in data centre projects,” says Waldemar Witczak, Regional Director at SEGRO. “As Polish and international players continue to report a growing demand for modern data centres, Poland is likely to see more land being allocated to data centre development in the coming years,” explains the expert. SEGRO has been one of the European leaders in data centre development. The SEGRO Slough Trading Estate in the UK is the world’s second-largest data centre conurbation, currently hosting 29 data centres across a total of over 330,000 sqm of total floor area.
Panattoni also has a portfolio of data centres in Poland, Germany, England and Spain. Its high-tech buildings, located near Amsterdam, London, Frankfurt and Warsaw, perform data storage operations for many countries in Western, Central and Eastern Europe. Most are held under long leases. In Poland, Panattoni is currently developing data centre projects of 28 MW and is planning to build more. Although many of its data centre buildings have an area of up to 1,000 sqm, they offer 3-3.5 MW of capacity. By comparison, an average 10,000–20,000 sqm factory requires approximately 1 MW of energy to operate efficiently. Due to huge energy requirements, developers have to build main power points connected to high-voltage lines. “Energy security is critical to data centre operations as stored data is sensitive. That’s why many data centre projects feature several or even more powerful generators with a capacity of up to 1.5 megawatts each and fuel consumption of 500 litres per hour. Fuel tanks and barrels must be kept at hand for emergency supplies to ensure energy security. There’s no place for even a split second of a power blackout,” says Michał Samborski, Head of Development, Panattoni.
The focus is on Warsaw, followed by Wrocław, Silesia and Tricity
The pandemic has significantly accelerated the digitalization of companies and many other spheres of life but shopping in particular. “Due to increased web traffic generated by online shopping, the technological infrastructure of e-retailers began to near its maximum capacity at some point and the loading speed for webpages, photos and other features of a retail offer slowed down, which had an immediate knock-on effect on retail sales. To continue to operate efficiently, many companies turned to cloud services offering scalability and sufficient capacity to meet the demands of unexpected peaks in sales,” says Natalia Mika.
According to data from K2 Group, 58 percent of e-commerce companies throughout Poland rely on public cloud infrastructure. This trend has been confirmed by a PMR report on data centres which has revealed that the total capacity of commercial data centres in Poland is expected to double in the space of the next six years from close to 110 MW in 2021. The report’s authors estimate that the Polish data centre market is worth over PLN 2.6 billion, with the highest concentration of such data centre projects being in Warsaw. Investors are also targeting Wrocław, Silesia, Tricity, Krakow and Poznań. According to the PMR report, at the end of 2021 Poland had nearly 120 facilities offering server colocation and hosting – most having an area of up to 200 sqm; by comparison, leading operators of colocation infrastructure have over 4,000 sqm per facility.
Far from airports, tracks and petrol stations
Data centres are technologically demanding structures which differ significantly from typical warehouse units. “First of all, they need continuous access to network infrastructure and uninterruptible power supply supporting equipment. Data centre servers require a strictly controlled operational environment with a safe range of temperatures, which requires precise cooling. In addition, power demand is much higher due to the high power density in a relatively small space,” says Natalia Mika. Choosing the right location is a challenge. “Plots with medium voltage power systems supplying high power, preferably from two independent sources, or regional power points, and ideally from more than one electricity provider with their distribution networks, are most sought after. Such locations may include post-industrial sites. And on account of data centre safety, locations remote from flight zones, floodplains, petrol stations or other technical installations with a risk of explosion or even railway tracks are the top picks for data centre development,” adds the expert from Newmark Polska.
“Data centre clients and users predominantly come from Western Europe or the US and such sectors as ICT/Telecommunications, Tech Data Storage, Pharma/Lab and High-Tech Components Engineering,” says Michał Chodecki, BTS Development Director, Panattoni. “Such buildings serve the operations of their manufacturing and research companies not only in Poland but the whole of Europe, providing suitable accommodation for safe and cost-competitive data storage.”
Complex build-to-suit projects
The physical safety of data stored on servers is the top priority in building design and access control procedures. “Some buildings feature Lampertz rooms designed to resist electromagnetic interferences, earthquakes, flooding and other natural disasters. Fire-fighting systems are also designed differently. Most fires will be put out by a special mixture of gases without damaging critical server systems while fully protecting the safety of people in the data centre during the accident,” says Natalia Mika. That’s why the design and construction of such projects must be contracted with professional companies that have strong know-how and the capability to meet high client requirements.
“We recommend build-to-suit projects to our clients as the right location must be carefully chosen to ensure fibre connectivity and appropriate power supply. The data centre building must meet special requirements. It must provide a much higher fire resistance which is unlikely to be achieved by adapting existing space. For this reason and on account of the required data safety, it should be a standalone building,” comments Waldemar Witczak, SEGRO. “Today, data centres in Poland are largely small buildings with an area of less than 200 sqm and the data centre market is fragmented. Adapting or extending existing buildings is both time and cost-intensive. After some time it frequently turns out that more space is needed – for new servers or staff rooms to accommodate the growing headcount. That’s why as more international companies are expected to enter the Polish market, demand for data centre space is likely to grow, reaching thousands of square meters.”
Michał Chodecki from Panattoni shares the view that BTS projects are the best solution for clients on account of data centre technical requirements. “Until recently the focus has strongly centred on freehold, but the present trend is that companies wanting to concentrate their forces and capital on current business activity and growth are increasingly considering leasehold as the most financially favourable option whilst ensuring a comfortable environment for operations in a building. The BTS formula for project development with an experienced developer is a guarantee of first-rate efficiency to the client,” says Panattoni’s expert. “The client can count on us for support right from the start of preparations for a development project, beginning with the choice of an appropriate location. Datacenter properties are very special, so we also adopt a highly specialized approach to their construction,” concludes Michał Chodecki.