- What Market watchers say Canada has a unique opportunity to become a future data centre powerhouse
- Why Relatively affordable power and large amounts of available land are attracting companies in need of data centre space
- What next The national data centre market is expected to triple over next 10 years as Toronto, Vancouver and Montreal attract interest
Market players are bullish on Canada’s data centre sector as an attractive alternative to the overheated U.S. market.
With the “AI arms race” fueling unprecedented demand stateside, large cloud providers, also known as hyperscalers, in need of hundreds of megawatts of power are scoping out opportunities in and around Toronto, Montreal and Vancouver. Those markets offer relatively affordable power rates and large parcels of land that could house data centre campuses.
“There has been an absolute explosion even within the last 12 months,” one Toronto broker told Green Street News. “Largely specific to AI, and a lot of that demand is coming from the largest players in the market: Microsoft, Google, Facebook and Oracle.”
According to a 2023 JLL report, there is 4.1m sq ft of available data centre space in the Greater Toronto Area, the country’s largest market for data centres, with another 1.4m planned. While land can go for as much as $5m/acre in Toronto proper, providers are looking outside the city at convertible agricultural land for more affordable deals.
Interest is also rising in Montreal, where large data centre providers such as Equinix and Compass Datacenters are constructing and/or planning new facilities. Cushman & Wakefield expects nearly 5m sq ft of new data centre space to come online in the region in the near future.
While significantly smaller than Toronto and Montreal, Vancouver also is tipped for high growth due in part to the presence of “colos”, data centre facilities leased and occupied by multiple companies.
While U.S. markets remain considerably larger in terms of power capacity – for example, Reno, Nev., can accommodate a 900MW facility, more capacity currently than the entire Toronto market – demand for Canadian data centres is only expected to grow.
This week, Canada saw its largest data centre deal ever. Toronto-based private equity company Fengate Asset Management bought eStruxture Data Centers for $1.8bn, adding 15 Canadian data centre sites, reportedly comprising 760,000 sq ft.
“This strategic investment will accelerate eStruxture’s hyperscale growth, providing a launch pad for transformative expansion and solidifying its leadership in Canada’s digital infrastructure market,” the company said in a statement.
The “gold rush” of data centre interest is forcing companies to act quickly and secure property for data centres, even if it means paying up.
“It’s less of a buyer’s market than it ever has been,” eStruxture senior vice president Strahan McCarten said during a panel discussion at this week’s Data Centre Investment & Expo in Toronto.
“There was a long time where pricing was generally declining in the market where there was more supply than demand … that’s no longer the case.”