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How Does Demand Differ in Canadian Data Center Markets?

Jul 5, 2018
by Josh Anderson

TORONTO, ONTARIO — What makes Canada unique? What drives demand across the various sub-markets in the Northern State? These were the central questions of Battle of the Red-Hot Canadian Markets in 2018: Comparing and Contrasting Montreal, Toronto, Calgary and Vancouver from Site Selection, Connectivity and Incentives, one of the signature panels at CapRE’s Canadian Data Center Summit held May 22nd, 2018 in Toronto. The panel had a distinct Toronto-bend to it, but the moderator made sure to think outside of the box, touching on topics such as power and demand profiles. Below is a transcription of part of that discussion

Randolph W. Borron, Vice Chairman, Cushman & Wakefield: Let’s talk about power and on-site generation. We are seeing some really interesting solutions come out of the US – were seeing data centers being built by generating plants. We’ve seen some of it here in Canada in a small way. Are we going to see more of it? what’s the future, and who’s using the global adjustment to save dollars?

data center summitScott Metcalfe, VP, Business Development, Ascent MCC Holdings LTD.: I can speak to this a little bit. We have some financial institutions that have expressed interest in our facilities. And if they’re providing a 2N solution, then they simply can’t have a co-gen operation. They can’t have an offloading program n place. It just doesn’t work for them. So if you have one tenant in the building who wants it and one tenant that doesn’t, what do you do? I think we’ve chosen not to go that route right now. But that’s sort of subject to change.

Borron: When we look at Calgary to Montreal, across Canada, there are advantages and disadvantages to each market. You must be faced with, I want to be in this particular market for this particular reason. There are some key advantages in those markets. There are key reasons why the operators are in those markets. Because the supply is coming along.

If you have to sort of highlight who is going to Vancouver for what reason, what’s the make-up of the demand profile that’s going into each of these markets? How would you characterize it? Mike you talked a little bit about Montreal and the demand drivers in terms of hyperscale and media.

Mike Segal, VP, International Business Development, ROOT Data Center: I would say that Vancouver shares a lot of similarities to that of Montréal. We see a lot of post-production video, for example, and gaming, largely driven by government incentives to those regions, for the industries to open offices and to create jobs. What I’ve learned about video production for example, is not only will the government in Vancouver or Montreal pay part of the salaries of all of the staff that you hire, but if Disney or Marvel or one of those studios contracts to do the rendering in that city – i.e., Vancouver – they get a tax incentive on top of that.

So there’s a lot of double- and triple-dipping amongst the various actors involved in these projects, which is a boon. But definitely in Vancouver there is a lot of video. We kind of view it as more of a retail, connected type of data center market, as opposed to a really hyperscale data center, which you’ll get in Calgary and Montreal and even Toronto for that matter.

In Calgary, for example, there is a lot of oil and gas. If you walk around the Q9 facilities, there are massive cages. Like 300, 400, 500, 600, 700 kilowatts plus sizes of deployments. They’re largely oil and gas companies. All of their applications in there. old mainframe style application hosting. So I would say that you see larger data centers there whereas in Vancouver it’s still sub-hundred kilowatt deals. Jamie, could you allude to that?

Jaime Leverton, General Manager, VP – Canada and APAC, Cogeco Peer 1: Yeah, our data center at 5×5 is predominantly retail, a ton of media. And a lot of customers that have been with us for a long time looking for low latency, that is our highest utilized data center. We just did a renovation there to free up some more space. but as soon as we free up a cabinet, it’s sold. It’s a really, really, really hot market in that building. Again, we don’t see the big deals, it’s usually sub-100 kilowatts that they’re looking for, so it’s difficult for us to figure out what expansion strategy makes sense in Vancouver. But it’s our hottest data center.

For more analysis on the Red Hot Canadian Data Center Markets, check out previous CapRE Insider Reports:

Banner Photo (L-R): Scott Metcalfe, Vice-President for Business Development at Ascent MCC Holdings LTD, Mike Segal, Vice-President for International Business Development at ROOT Data Center  & Jaime Leverton, General Manager and Vice-President for Canada and APAC at Cogeco Peer 1 

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