Latin America’s Data Center Market to Experience 61% Growth Spurt by 2014

March 2, 2010
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user thejourney1972

The data center real estate sector in areas across Latin America will grow by an average 61 percent by 2014, according to a recently released report by London-based international consulting firm BroadGroup. However, the report, entitled Data Centres Latin America–Competition, Demand Drivers and Growth, concludes that the massive expansion of available properties still will not be enough to accommodate the anticipated increase in demand four years from now.

BroadGroup’s report covers Latin America’s seven leading markets, which are Argentina, Brazil, Chile, Colombia, Mexico, Panama and Peru. Together, these markets encompass over 200 data centers, with Brazil having the largest amount of space. Many countries across the globe, like the U.S., are still reeling from the worldwide economic crisis, but Latin America is moving into an economic position that will help spur demand in many industries, including the data center sector of commercial real estate. São Paulo and Santiago de Chile will have the greatest need for additional data center space, as their economies are more predictable.

“There is no threat of over-supply of facilities,” BroadGroup asserts. “Research for this report has been conducted at an interesting juncture in data centre market evolution in Latin America, where although participation by carrier neutral data centres is still very limited, business models are changing and the prospect of new market entrants is increasing.” The call for new properties will come not only from new companies, but also from existing tenants. “Demand from enterprises and multinationals present on the continent is placing new pressure on data centres–dominated by telecoms operators, systems integrators and ISPs–to upgrade their facilities.”

While data center space is already on target to increase a whopping 61 percent, If Latin America is going to accommodate the anticipated spurt in demand, it will have to overcome a few obstacles. As per the report, “significant infrastructure challenges lie ahead, particularly those resulting from a lack of investment by the utility firms in power transmission, but also a lack of diversity in supply.” Additionally, “power generation networks and grid connections remain an immense challenge.”