Iron Mountain has signed a 27-megawatt lease for a new data center in Frankfurt, Germany, the company said this week. The huge deal serves notice that Iron Mountain has joined the top tier of data center developers that can provide capacity to the largest clients.
The large pre-lease with a U.S.-based Fortune 100 customer also highlights the continuing demand for data centers in Europe, particularly in the “FLAP” markets of Frankfurt, London, Amsterdam and Paris.
As the financial capital of mainland Europe, Frankfurt is the focus of intense development by the largest data center companies, including Digital Realty and CyrusOne, who both have new campuses under construction. In landing this huge deal, Iron Mountain showcased its ability to compete for the biggest deals with its largest rivals.
“We’re excited for the opportunity to serve as a strategic partner to an important Fortune 100 company,” said Eric Boonstra, Vice President & GM Western Europe, Data Centers at Iron Mountain. “We are building upon our already strong European data center offerings to provide even more flexible, scalable options for customers now and into the future.”
Nine Megawatts in First Phase
As part of the agreement, the customer will lease the entire 27 megawatt turn-key data center, with the initial 9 megawatts of power capacity to be taken upon lease commencement. The customer is committed to scaling to the full 27 megawatts of power capacity within five years. The lease is expected to commence in the second quarter of 2021, and has an initial term of ten years, with renewal options.
Iron Mountain pre-leased approximately 280,000 square feet, or 100% of its FRA-1 data center, which is being developed in three 9-megawatt phases, with Phase 1 expected to be complete in the second quarter of 2021. Full build-out of the data center is expected in the second quarter of 2022.
This is the first lease larger than 7 megawatts that Iron Mountain has landed, but the company has been preparing to deliver on opportunities for larger deals. Boonstra said creating these data centers is different from a traditional multi-tenant “retail” colocation facility.
“For retail customers, a couple of racks or a module works fine providing them a fully fitted out solution, but these customers need a different approach,” Boonstra told DCF in an update on European data center markets. “To start, they simply require a lot of white space ,and it happens that they have specific requirements which need to be taken care of in the design.
“The approach is different as well, as some providers are looking for a powered shell and want to know the amount of MW’s and some need a more fitted out solution where we help them out with more than just the basics,” he added. “It’s really about thinking along with the customer to create mutually beneficial solutions where we can serve as a long term partner for data protection, connection and activation.”
With a single lease, Iron Mountain has already eclipsed its 2020 goal of new leasing of 15 to 20 megawatts.
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“As we continue to focus on building out our platform with ground-up developments in Frankfurt and Northern Virginia, and expansions at existing data centers in Amsterdam, London, New Jersey, Northern Virginia, and Singapore, we will continue to identify the right opportunities that enhance our strong core enterprise retail colocation ecosystem,” said Mark Kidd, Executive Vice President and General Manager of Data Centers at Iron Mountain.
Large Customers Drive MegaDeals
Iron Mountain has spent 60 years building a reputation as the leading provider of document storage, with more than 225,000 customers around the globe, with a real estate network of more than 90 million square feet across more than 1,480 facilities. It sees the opportunity to win data center business with the power of its brand, particularly with customers in the government, healthcare and financial sectors that already partner with Iron Mountain to meet regulatory compliance requirement.
The company’s global data center footprint spans more than 3.5 million square feet across 15 locations on three continents. Iron Mountain has ramped up its data center operations in recent years through both acquisitions (including FORTRUST, IO, EvoSwitch and sale/leasebacks of enterprise facilities) and construction of purpose-built infrastructure in markets like Northern Virginia, Phoenix and Singapore.
In September Iron Mountain opened a new data center in Singapore, building on an expansion of its campus in Phoenix and nearly 4 megawatts of turn-key capacity across new facilities in Amsterdam and London. The latest addition is VA-2, a $225 million second data center building at Iron Mountain’s campus in Manassas, Virginia.
In 2019, the company boosted its ability to provide renewable energy for its colocation customers, using both power purchase agreements and a huge rooftop solar array.
Strength in FLAP Markets
Frankfurt is a top global data center market and the second largest in the European FLAP region. The market is home to one of the world’s largest internet exchanges, DE-CIX, which is a world-class peering exchange with hundreds of large networks available for customers.
In addition to Frankfurt, Iron Mountain’s European footprint includes data center campuses in Amsterdam and London. Iron Mountain’s AMS-1 data center campus now has 12 megawatts of capacity, with the ability to expand its campus footprint by 20 megawatts. IRM is currently expanding the campus, adding 1.7 megawatts of capacity, of which 18% is pre-leased, reflecting strong demand from both new and existing data center customers.
In London, Iron Mountain operates LON-1 in the Slough Trading Estate, with its existing capacity 74% leased. Iron Mountain is building out an additional 2.0 megawatt data hall in LON-1 to support robust demand, with an additional 2.0 megawatts of capacity held for future development at that site. In the fourth quarter of 2019, Iron Mountain entered into an agreement for a second site in Slough which will add 25 megawatts of capacity for future development.