Interxion to Build £30M London Data Center Despite Brexit Concerns

While many global banks have devised plans to move operations out of Britain in case of a “hard Brexit,” or the country’s full exit from the European Union’s single market and things like discontinuing unrestricted cross-border travel, Interxion is demonstrating faith in the London data center market by committing to a mid-size but nevertheless costly construction project in the city.

The Amsterdam-based service provider announced Thursday a plan to spend £30 million on what will be the company’s third London data center. The facility will add about 20,000 square feet to the service provider’s central London data center campus.

Interxion also announced plans to build new data centers in Frankfurt and Stockholm, citing robust demand in all three of the major European markets. The company made the announcements in the run-up to its fourth-quarter and full-year 2016 earnings report scheduled for March 1.

Construction activity by data center providers in the London market was relatively slow last year, but several major cloud providers launched data centers there during that period. Brexit has created an unusual dynamic for data center operators in Britain, where on the one hand companies need IT infrastructure in the country to serve what will continue being one of the continent’s biggest markets while on the other hand needing to beef up their European capacity outside of the UK to serve what will likely become a separate market, with its own regulations.

Recent UK cloud data center launches:

Interxion CFO Joshi Joshi told investors earlier this year that Brexit had a silver lining for the company. It will push enterprises to start using more public cloud services, which give them more data location flexibility, making them better prepared to deal with the current uncertainty. That, according to Joshi, will boost demand for Interxion’s services as cloud providers expand their capacity to serve those enterprises.

Still, the data center provider appears more bullish on other European markets than it is on the UK. Its recent investments in Germany and France, for example, overshadow the 20,000-square foot London expansion. It is building two data centers in Frankfurt, which will add 63,500 square feet total. The company is adding 22,600 square feet across two expansion phases in Paris and 15,000 square feet in Marseille.

The new Stockholm data center announced Thursday will be its fifth in Sweden’s capital and add about 23,700 square feet of space. Stockholm is an important network interconnection location for traffic traveling between Western and Eastern Europe.