Global Switch eyes acquisition trail

The company, which is jointly owned by TrizecHahn Corporation, Chelsfield plc and Unicorn Assets Ltd, is at the due diligence phase of a reverse takeover of Italian company Nuova Immobiliare to obtain a public listing on the Milan Stock Exchange, with further public listings planned. The company is aiming for total equity capital of EU725m.

Within a year, only a handful of international data centre operators will be left in Europe, according to Gabriel Ruhan, Global Switch commercial director. In Ruhan's view competitors will be hit by a triple whammy of industry consolidation, slow take-up of premium priced managed services and venture capital investors blinkered by short-term commitment. “It's been bad recently and it's going to get worse,” said Ruhan. “I'm not particularly surprised about what's happened to CityReach, but contrary to what the papers are saying, it doesn't mean the end of the industry,” he added.

Ruhan conceded recent estimates that only 40% of European data centre space is currently occupied may be correct, but claimed that 95% of the 23,000 sq m Global Switch London 1 facility is occupied. According to Ruhan, the company has also sold about two floors at its London 2 facility - a whopping 10 storey 63,000 sq m Docklands development due to open this year. In Ruhan's view, the proportion of unsold space is not an accurate test of the industry's health: “The sales cycles tend to be quite long - with leases of 15 years you sit down with a customer and work out their requirements over quite a long period. Also, with volatility in the markets, many companies are sitting back to see what happens over the next few months,” he said.

The company's current customers include carriers including Concert, Level 3 and Global Crossing, but claims to have seen increasing interest from large corporate customers.