U.S. Ranks As Top Choice for Companies Seeking Low-Risk Data Center Locations

Data centers support business-critical information technology systems, and any downtime can cost millions in lost revenue and even threaten the viability of a business.

Against that backdrop, the United States ranks as the top choice for companies seeking low-risk data center locations, reflecting the country’s relatively low cost of energy and favorable business environment, according to a new study.

Cushman & Wakefield and engineering consulting firm hurleypalmerflatt released details of the Data Center Risk Index on June 15.

The index, which evaluated risk in 20 leading and emerging markets and across key regional centers, scored India the least favorable with China also near the bottom of the rankings (see table).

“Despite their status as engines of global growth, China and India score poorly as a result of strict foreign ownership regulations and other barriers to investment,” says Stephen Whatling, global services director at London-based hurleypalmerflatt.

The risk categories factored into the index include energy cost per kilowatt hour, international bandwidth, ease of doing business, corporation tax, labor, political stability, sustainability, natural disasters such as the earthquake in Japan, GDP per capita, inflation and water availability.

The study’s authors argue that companies should be evaluating their risk across a greater number of criteria and locations, and mitigating or managing certain risks before investing in data centers.

Market strengths, weaknesses
One key emerging market, Brazil, is enjoying substantial growth and attention from foreign investors. Brazil ranks No. 12 on the index. “With improvements in international bandwidth and infrastructure and tax reforms for non-domiciled companies, Brazil could emerge as a Latin American technology powerhouse,” says Whatling of hurleypalmerflatt.

Sweden, Qatar and South Africa are untapped markets and attractive locations, although they require further investment in infrastructure, emphasizes Keith Inglis, a partner at Cushman & Wakefield who is based in the United Kingdom.

Inglis is sounding the alarm on unfavorable trends developing in the United Kingdom that threaten the growth of data centers. “High corporation tax, energy and labor costs in the United Kingdom mean there is a risk that owners and operators could begin to look overseas to reduce overhead.”


Acceptable Use Policy
blog comments powered by Disqus

Photo Galleries

New York's Star Deals

http://nreionline.com/images/nyc_big_deals_homepage_thumb.jpgThe city that never sleeps is also the city that never stops growing, not even in the midst of recession. And deals, both bold and unprecedented, continue to be done. Check out image of New York's big deals.

Hudson Yards Development

http://nreionline.com/photo_gallery/hudson_yardsCheck out images for Coach's new global headquarters, which will anchor the initial tower of the Eastern Rail Yards site within the 26-acre mixed-

Videos

JLL at ICSC 2012

http://nreionline.com/video/bjorson_thumbnail.jpgCheck out these videos from JLL at ICSC 2012 in Las Vegas...

 

Click here to view more videos.


Blogs


http://nreionline.com/blog/schein_blog_headshot.jpg

Real Vox

Traffic Court

The Full Nelson

Events

Strategic Real Estate Investment Conference

Date: Thursday, June 7, 2012
Time: 7:45AM-6:00PM
Place: 1290 Avenue of the America, 5th Floor
What: A full-day event exploring portfolio diversification through opportunistic and alternative investments....

Click here to view more events...

http://nreionline.com/nrei-300x125-house-091211-resourcebook-jpg.jpg

This Week's Most Popular

Current Issue

http://nreionline.com/april2012_cover.jpg

NREI Newsletters



Retail Traffic Newsletters

View NREI Newsletters

NREI Newsline
NREI Seniors Housing Finance and Development
NREI The Green Sheet
NREI Institutional Outlook
NREI Distressed Real Estate Strategies
NREI Daily/Central
NREI Daily/New York
NREI Daily/New Jersey
NREI Weekender
NREI Global Real Estate Monitor
REIT Insider
Retail Traffic Online
The Site Optimizer

Join the Conversation