In the four years since it was founded, eStruxture Data Centers has developed three data facilities in Montreal, and others in Calgary and Vancouver. Now it’s buying another eight data centres including five in Toronto.
The Montreal-based company is just one of a number of players in a very competitive business whose rapid growth has been stimulated by trends that have accelerated during the pandemic, according to a survey by commercial real estate company CBRE.
The latest North American Data Center Trends Report shows that Toronto saw the second-most data-centre-leasing activity in North America in 2020 with 38.1 megawatts (MW) of data-centre capacity leased in 2020, bested only by Northern Virginia, where data centres that support the U.S. federal government added 217.2 MW of data capacity. Montreal was ninth on the list, with 11 MW of net growth in 2020. (For perspective, one megawatt is enough to power up to 1,000 homes.)
And it’s only the beginning of a continuing boom, predicts CBRE’s Montreal-based senior vice-president David Cervantes, who co-leads the company’s Canadian data-centre business, along with vice-president Scott Harper in Toronto.
Factors expanding the cloud include remote work and online financial trading, streaming entertainment, 5G technology and artificial intelligence. “The big cloud providers, including Amazon, Google and Microsoft, have turned their focus to Toronto right now and we’re seeing their next phase of growth,” Mr. Cervantes says. The Vancouver market is developing as well, but deals are scarcer because real estate in Vancouver is extremely expensive, he adds.
The inventory of modern data centres in Canada is more than doubling every year, Mr. Harper notes. Canada has 279 data centres and ranks fifth globally for data-centre density. The scale of projects is mushrooming. “The four-megawatt data centre used to be big. New projects are moving to 30 megawatts and beyond. And there are going to be many more built in the future,” he predicts.
In fact, Dallas-based Compass Datacenters, which has moved into the Canadian market, is currently building a massive data-centre campus on 225 acres of land south of Dallas whose facilities will have a combined 250 MW of data capacity. The new campus requires a dedicated high-voltage power substation, and is served by multiple carriers with diverse fibre routes.
In Toronto, Compass is converting a former warehouse in Etobicoke to a 30-MW data centre and the company is scouting for additional sites in Canada on a scale of 50 to 75 MW, says A.J. Byers, president, international for Compass.
“The key elements of a data-centre location are proximity to the fibre networks available in the region and, maybe even more important, is the amount of electricity that can be supplied to the building,” Mr. Byers says.
“Because these are facilities that have to remain running 100 per cent of the time, we always have to assess nearby risks, such as gas stations or heavy truck traffic that could disrupt service.” A challenge in Toronto is there is not a lot of land available to build from scratch. “So, our next-best approach is to look at where we can do a retrofit or conversion,” he says.
The Etobicoke site is a former low-rise warehouse which is being fitted with 3,000 racks, seven feet tall, that will contain a total of 150,000 computers or servers. “That creates a tremendous amount of heat and there’s a need for large-scale cooling. In addition, there are backup power generators to keep everything up and running even if there is a power outage, and battery backups to keep things up when we switch from power to generators.”
eStruxture Data Centers is currently finalizing a purchase of eight existing data facilities in Toronto, Montreal and Vancouver that were originally owned by Cogeco Data Services and later sold to a private equity firm, says Todd Coleman, the company’s president and chief executive officer.
“We certainly see Canada has a hotbed of data-centre development. Toronto is the country’s commercial and telecom hub and is seeing significant data-centre growth resulting from the scale of data that needs to be stored and accessed there,” Mr. Coleman says. “Meanwhile, in Montreal, the story is the cost of power. You’re going to pay about two-thirds less for power in Montreal compared to Toronto, and power is one of the single biggest costs in running a data centre.”
The search goes on for new locations to stay ahead of demand, he adds. “This business is ‘build it and they will come’; we don’t have clients who will wait 12 to 18 months to build a new data centre. When they need it, they want it now.”
From industrial to digital: refitting printing plants
As newspapers go digital, massive printing plants that have become redundant are finding new life as data centres. That’s already been the case of the Toronto Star’s former printing facility in Vaughan, Ont.
When the former Montreal Gazette printing plant, on Saint-Jacques Street in Notre-Dame-de-Grâce, became available after sitting idle since 2014, it struck Todd Coleman, president and chief executive officer of eStruxture Data Centers, as a perfect fit. “It’s a 156,000-square-foot building on 10 acres on land. And it’s a great example of converting a building from the industrial age to the digital age,” Mr. Coleman says
The building had to be cleared of its huge printing press, conveyor belts and jumble of rooms for paper and ink storage. The building was expanded to 190,000 square feet and the company worked with Hydro-Québec to upgrade to 30 megawatts of power. “That’s enough to power a small city,” Mr. Coleman notes.
The football-field-sized press room was three-storeys tall, which meant they could add a second floor and put the heavyweight equipment on the sturdy concrete floor and lighter equipment above. Cooling servers is always a challenge and air-conditioning equipment was installed on the roof.
There are multiple fibre entrances from different sides of the building for redundancy “because every time you’re working with fibre, your worst enemy is a backhoe,” Mr. Coleman says. “When someone digs up a street, or a water main breaks, it can saw right through a fibre feed. We can’t afford to ever be out of service.”
It’s often harder to retrofit an existing building than it is to put up a new building, he explains, but says the site was “ideal.”
“We could never find a piece of buildable land nearby that had the same attributes.”
It was also a plus that the Gazette press centre is a landmark building in Montreal, he adds. “For us, the benefits of reusing something that Montrealers take pride in adds a lot of value.”
Most active North American data centre markets in 2020
Northern Virginia 217.2 MW
Toronto 38.1 MW
Dallas-Fort Worth 33.7 MW
Silicon Valley 26.6 MW
Atlanta 18.2 MW
Phoenix 17.5 MW
Central Washington 14.5 MW
Chicago 13.1 MW
Montreal 11.0 MW
Seattle 6.9 MW
Source: CBRE Data Center Trends Report