Not Your Father’s Data Center - The Euro Market & What to Expect in the Industry in 2023

Episode Date: January 10, 2023

The world is in an energy crisis caused by many events affecting billions. Yet, while others are focusing on how this might affect oil & gas prices, the critical piece missing from the news is how this will involve a business that helps lift the entire market: data centers. So, what impact will the crisis have on data centers, and what is the forecast for the industry heading into 2023?   On the newest episode of Not Your Father’s Data Center podcast, host Raymond Hawkins engages with returning guest Andrew Jay, Executive Director of Data Centre Solutions, Advisory, & Transaction Services EMEA CBRE. The two review… What is affecting the data center market, including the investment market, geopolitics, and the energy crisis How data centers are coping with and preparing for challenges now and into the future The future of the market, particularly the outlook for data centers into 2023   “...What we’re trying to do is very much bring the end users to the table with the public authorities and say, ‘Look, how do we sort this out together?’...,” said Jay.   Jay is the Head of Data Centre Solutions with EMEA Advisory at CBRE and has been with CBRE for over 23 years. CBRE is a London-based worldwide commercial real estate services and investment company.

Welcome to another edition of Not Your Father's Data Center. I am Raymond Hawkins, your host, and we are fortunate enough to be joined for a second time by Andrew Jay, our friend in London with CBRE, I believe head of data center solutions for EMEA for longer than he may want to admit, but a few decades. Andrew, how are you doing? Good, thanks, Raymond. Very good indeed. How are you? We are good. Thank you so much. I know my team gets upset with me when I date these, so I won't date them, but we're recording here in the fourth quarter of 2022, and the economy has gotten a little soft on us and interest rates are going up. And I think

there's lots of questions about our business. So as I think about things that I'd love to chat with you about, Andrew, is how everyone talks about flap or flap D. I'd love to hear how the big markets are handling the incredible growth we've had the last couple of years. I'd love to talk about the second tier markets over there a little bit and love to talk about how my friends on the other side of the big water are viewing. I don't want to say we're in a global recession yet, but certainly we're in a little bit of a slowdown. So love to talk about all three of those at a high level.

Andrew, if you'd love to tackle any of those in order. But before we get into those business things, I'd love it if you'd remind the folks who have heard you before, or this is their first time, a little bit about yourself, that'd be great. Wow, yeah, so very un-British this bit. A little bit about myself.

So I've been at CBRE a long time, but I know you said, talk about my family and things. So I've got, I live in london near london just outside um up in the countryside about a 30 minute uh 30 mile journey into central london takes me about an hour i've got a wife and two fantastic kids two boys harry and ollie they are 19 just they have to be 21 so So an interesting time for them. And I enjoy- University for both of them at that age? Yeah.

Well, one's at university studying psychology and the younger one has just done his, what we call our A-levels prior to university and he's having a year out. And so he's doing some more exams and he'll be getting a job and all those sorts of good things before going to uni in about a year's time. So yeah, all is good. Excellent. Yeah, we call that a gap year over here. And both of mine graduated young, graduated at 17. So they took a time off between high school and college. So I hear you there.

All right. So you live in north of town in the country, wife and kids. Do you want to get into the details around your football club? Do you have one? I mean, let's just get right down to the nitty gritty. Arsenal's at the top of the table. They're squawking a good bit. Does any of that move you or do you not care? So not particularly, but I was born in Yorkshire, which is one of the counties of England in a place called Sheffield. And for any football fans out there, we've got two big teams, Sheffield United and Sheffield Wednesday. So I was always on the Sheffield United side, but Wednesday always seemed to perform a hell of a lot better. So I think I made a poor choice there. But it's not something I'm looking at all the time. My pals that I cycle with and things, they're always chatting about the football and I sort of glaze over a little bit at that stage. But, yeah, it's something for everybody. Gotcha.

Well, tell us now. You've opened the door now. Tell us what bike you ride. This is a cycle. So I am so heavily into my cycling that I actually have a bike. I don't even know what it's called. A pal of mine who's really into his bikes, Kenny, he was showing me his new super duper bike. I don't know what it is, but it cost him thousands. And I said, well, what's wrong with your old one? And I ended up in that conversation, putting his old bike in my car. And so I've got his secondhand bike.

But we're going in a recession. So you've got his secondhand bike, you know, it's, but we're going into a recession. So you've got, you've got to tighten your belt, haven't you? Brilliant. Yeah. Yeah. So, so I'm a, I'm a, I'm a specialized guy. So, so I ride the specialized Tarmac SL4. This is my third specialized. So yeah, I love the, I love the social aspect of riding the bike. You know, they're, they're during week, I go out by myself and I probably don't want to do any more than 30 or 40 miles on my solo days because it's just too boring by yourself. But I love the weekends when you can spend two or three hours chatting it up with a peloton of guys and getting a ride in. So I really, really enjoy it. Yeah, that's me. It's the chat and then the bacon sandwich and the coffee at the end after a couple of hours. That's what it's all about.

That's right. Yeah. And you don't feel guilty having a big breakfast after the ride. You're like, look, I just did 50 miles. I can eat whatever I want. Very good. Well, Andrew, glad to hear that we've learned you're a Sheffield United guy. You're a cyclist, although a frugal one, which is wise because I've got friends that have $30,000 bicycles and I just can't even imagine. I'm like, why would you – that bike $20,000 or $30,000. They have their mountain climbing bike that's $20,000 or $30,000. And then they have their TT bike that's – I'm like, guys, do you need $90,000 worth of bicycles? Stop. It's ridiculous. It's a lot of bike. That's my goodness. I can't even imagine it.

That's a lot of bicycle. Those are my friends who don't have kids in university. That's for sure. Well, Andrew, thank you for letting us learn a little bit about you. We enjoy that. You take the other ones in whatever order you'd like. We'd love to hear about the big markets, love to hear about tier two, and love to hear about how Europe is thinking about where we are in the economic cycle, right? The business cycle, it appears, you know, U.S. is tightening. You guys have, I know the pound has gotten a little bit weak lately, and there's been some tumult in your government as far as banking systems.

So how's the rest of the world looking at the economy? Any of those three you want to take first, that'd be great. I guess it all pushes down onto the data center market directly. So I thought we were pretty insulated from the downturn in, say, the industrial logistics market, which has seen an absolute downturn, a real pounding. And I thought the data centers were doing all right, actually, just because of our underlying demand from the end users. But actually, that's now starting to percolate through, particularly for the investors. So we've had one investor pulled out of two of our transactions where we're selling data center investments. And their reason was they just said, look, why would we buy now when we can buy in a year's time at a lower rate, a lower entry cost and have lower costs of debt.

And it's difficult to argue against that. So I think the investment market certainly had a downturn. And if you just look at the quoted developer operators, stock prices, that's a pretty good indication as well as there's been a lot of value uh degrading out there um you know in the in the last few months but you know it's not often that we've got the uh you know the from a uk perspective the brexit fallout uh we've got uh an awful war on our doorstep first real real one in my lifetime that's close to home and of course we've course, we've got the shakeout of the two years of the pandemic. So it's a pretty amazing set of circumstances that we've got that we're living through at the moment. So Andrew, and I appreciate you being willing

to take not really data center subjects and talk about them and give our listeners perspective from Europe, which we really, really appreciate. You hit on some big ones, right? The post the pandemic, the war in Ukraine. There's talk here in the US about concern for the energy across Europe through the winter and how that impacts our data center business. If we end up shortages on fuel and we need to be on generators, we're getting asked those questions by all of our customers. How is that getting discussed and how's that viewed from a macro business cycle sense, but also from a data center sense, worried about fuel and energy and heating oil and those kinds of things during it through the winter?

Yeah. So it's a massive concern for everybody in that such a large quantity of our gas was coming from Russia and that's pretty much stopped now. I think Germany, something like 40% of their energy effectively was coming from Russia. I may have that slightly wrong, but in other words, it was a massive, massive amount. And so we've got some real, real challenges on the energy side. And I think there's a lot of energy out there, but getting it distributed around to the places that need it is really tough. So we are, if I talk from a UK perspective, so I actually chaired a meeting with one of our government departments just two or three weeks ago, specifically saying, look, if, and it's a big if, and we mustn't over-dramatise this or panic people, but if there were to be any kind of rolling power outages in the winter,

and I think it's doubtful we are going to have them, but we have to prepare for them and we are talking about it. And the government department were saying, well well what's what's the what's the impact on the data center side and we say well you know don't worry about the data centers it's what happens inside them that you've got to worry about it's the financial markets it's the the traffic lights on the streets it's the health service you know it's everything um and so i think the view is that look the data centers are designed to operate off the mains power. That's the point of having the redundancy and resilience.

So you mentioned prioritizing diesel. And to your point, when I talk about let's keep the data centers up, it's not so our businesses can run. I think you make a great point. It's so that the businesses that we serve, the crucial critical systems, hospitals and lights and transportation, all the things that run in our buildings, all the logistical things that run out of those services. And thinking about diesel fuel, that was probably my first thought is, hey, is there going to be sufficient diesel fuel for us to be able to operate offline if we lose utility power? And it sounds like you guys are already ahead of that and already thinking about that. And winter presents a problem here, but not quite on the same scale that it does in Europe. So good to hear that y'all are talking about it and thinking about it. And also want to remember that sure wish that we weren't at war.

Wish that there wasn't a war going on to cause these kinds of problems either. Far more serious humanitarian issue, but we do need to think about running the business as well that's going on. All right. Well, thank you for talking about that as a macro problem. How do you guys, and I'm not necessarily asking you to speak for CBRE, but how do you guys feel about slowdown? I appreciate you mentioned some projects have slowed down or investors have pulled out. Do you think this continues for a while? Do you think this is short-lived?

What's your thoughts on – I look back and we're coming out of two years of just crazy demand for what we do because of the pandemic and the work-from-home economy. And I don't think that trend can continue, but I'm with you. I do feel like there's some level of insulation in our industry, right? People aren't getting less – they aren't spending less time on the internet. They're not getting a less digitized future. So I don't know. It might no crystal ball but the the interest rates are interest rates in the uk the bank of england raised them today literally just um about three hours ago uh by 75 basis points so that's the biggest single rise we've had in our base rates for something like 20 years, you know, plus. And so it's that cost of borrowing that is the real,

it gives us the real impact. And so when is that going to change? Well, our current view on the data center side is we're probably going to see some further increases and we'll probably see it peaking in quarter two of next year before it then starts to come down and a lot of our financing for the data center projects and general property lending is linked to the the swap rates often the five-year swap rate and. And so we're looking and looking with our economists

as when that's going to start to come down. Yeah, I think towards Q2 and middle of next year, that should start to come down. But it's other things as well, because we've got the loan-to-value ratios have come down significantly. We were at 70%, 75% loan to value. We're now down at 60% if you can get it. So actually getting access to those more expensive funds is becoming pretty tough. And the loan premiums, the risk premiums on these loans are going up significantly as well. So where if you go back 12 months, there were quite a few people in the market who perhaps haven't got massive track records, but they may have had a really nice piece of land. Those people are struggling now to be data center developer operators. You know, we're almost going back to the really established companies who have got revolving credit facilities and deep pockets.

They can stick a lot on the balance sheet without it hurting too much. And those people are really coming to the fore because of the economic problems. But, I mean, do you want me to talk about some of the demand as well? Because I think the demand- Yeah, yeah. Happy to transition to the demand side. But yeah, no, I love this talk about, completely agree with you that our Fed raised three quarters of a point yesterday. Credit continues to tighten, not only in what it costs, but how much is available. I mean, almost exactly the description you gave for there in the UK and in Europe. So very similar view here. Harder to get money. Going to really, really tax the guys that

don't have the balance sheet or the track record to withstand the tightening credit policies, the limited amount of funds or the increased cost of the funds that you can get. It's going to be tough for the guys that are fairly new to this business or have a fairly small portfolio. It's going to get really, really hard, I think. Love to switch and talk to the man side. But yeah, I think this part to me is fascinating as well,

what's going on and how future development gets funded. Yeah. And the demand, I think you wanted to talk about some of the secondary and emerging markets. So I'll try and pull back from those altogether at the moment and just talk about our flap D markets, which I think everybody knows. That's the Frankfurt, London,ondon amsterdam paris and dublin markets and we are continuing to see really significant growth of demand from the big hyperscalers you know it's as simple as that um so this year 2022 we will see total take up for the year we reckon is going to be behind that little bit. And it's one of the

first years we've seen more take up than we have new supply coming on. New supply, I think we're going to be at about 380-ish megawatts coming on. So a little bit of a mismatch there, but it just shows how strong the demand is. And that take up is higher than it was last year, not by much, but only by probably 10 or 20 megawatts, which is nothing really in the scheme of 400. But there will be a slight increase. So we're just in this new normal. It's extraordinary. If you think back, gosh, six or seven years, 100 megawatts was an incredible year, like a really incredible year above the long-term average. And now we're talking about 400.

It's amazing. 800 over two years is just staggering. And that's a staggering amount of growth in a two-year window. Just the fact that our industry could finance it, the fact that our industry could build it, the fact that our customers could absorb it. I mean, those are just incredible numbers. Yeah. And I know it's not Northern Virginia, but it's a lot of megawatts and a lot of investment. But it's getting, particularly in these flat markets, flat D markets, it's getting more and more difficult to not just because we talked about the funding elements and that's getting quite hard.

But finding land appropriate to build data centers on is becoming incredibly difficult because whilst we've got this high demand, it's hugely polarized towards the existing availability zone. So you take all of our big markets, take Paris, take London or Frankfurt, you've got a tiny area which has the main availability zones, and it's those zones that are increasing in size. We had always, I guess, hoped that the hyperscalers would be able to say, fine, we've got an availability zone there in London, West London, Slough, wherever. Let's now go to East London, build a new one there where there's more power, more land. But that hasn't really happened and they are very much focusing on these existing areas and it's the same you know the sossenheims

um you know the parts of paris and and areas like that and so we are getting to the stage now where we are out of surplus power on the grid that's available in the geographic areas that we have the availability zones. And so what that means is our lead time now in some of these big markets for power delivery can be as much as eight, nine, and 10 years, which is just ridiculous. Clearly, no one can wait eight, nine, and 10 years. Yeah, no one's planning that far out. Yeah. No, exactly. Are you seeing it? Andrew, I know that, I mean, I think it's been pretty well publicized that Dublin's done with power for a while. And I think your description, right, it's amazing the gravitational pull around these AZs, right?

And how much demand has to stay in that little sub-market inside Frankfurt or London or Amsterdam or Paris. In those little tiny sub-markets, are you seeing any of them that have available power growth? And I'm not saying name them by name, but do you go, hey, Frankfurt's not as bad as Dublin. I mean, how do you rank them as far as who's going to be able to have some available power? Because we see the exact same description. I mean, four, five, six, eight years. We just can't plan around that from a power delivery perspective. We're in an interesting time at the moment because a lot of developer operators of data centers, but also traditional real estate companies, twigged, let's say, a year, 18 months ago.

How do you leverage value from your real estate for data center, well, you get a zoning permission on it and you get the planning permission, sorry, and you get the power reservation. And so, assuming the place is in the right location and the locations we're talking about. So, what those companies have done is put these massive power reservations into our national grid in the case of the UK, exactly the same dynamic in the other countries. And we're in that sort of shakedown period at the moment where a lot of power has been tied up but hasn't yet been used. And so there are sites that are being traded on the back of having a power reservation attached to the site itself. I mean, and that's just mad. We've never had that before, but that is what's happening. So the answer to your question is we're in a shakedown period

at the moment where the currently tied up power is gradually being used up, that's going to take probably a year to two years, probably a good two years in fairness. And then we really, really are out of power in these areas. And so it's at that point that we will have to then leapfrog. And I think this is what's going to happen. it's going to leapfrog to somewhere else. And I think they're probably going to go to take a much, much broader view and say, look, where is there a large amount of power? If we can get green power, then that would be fantastic. Where's there a lot of land and how can we match up all of these factors and go somewhere where we can start to build some just really big campuses rather than

the sort of hand-to-mouth existence that is the case at the moment where you choose a highly populated, very, very busy real estate market to grow in. Wow, Andrew. You said something there that land is trading based on the power commitment or the power contract or the power availability. Someone's tied up that commitment with the generator or the service provider. That that's become the long pole in the tent is just unbelievable. It's really, really shocking. But it's true. The power demand is so big for our customers that I tell folks all the time, my customers ask five questions. They ask them in order and they ask them every time, are you in the right market? Are you in

the right AZ? Can I put the pin where I want to put the pin? Can you get me the capacity I need when I need it? Can you show me how I can grow to the size I need to grow to? Those are the first three questions. And they're all around power, right? I mean, yes, location matters, but the location only matters if there's power to do question two and question three. And it's fascinating to hear that land is trading based on power commitment. And you also nailed it. Because once we get all the power we can get out of the grid in, let's say, a London, right? I don't know who the name of your power provider off the top of my head, but they're not going to build another 30% of infrastructure in Slough, right? That's not happening, right? There's just not capacity for it. So your idea that we've got to jump somewhere

else, I think is dead on. And I think your timing's right too. Two, three years from now, we're going to be asking, okay, where can I develop to support Frankfurt? That's not Frankfurt. Where can I develop to support London? That's not London. Because we've just about tapped out what the energy providers can give us. Yeah, here, here, fascinating stuff. And I think there's, I mean, there's some also some concerning effects as well. So I've got one public authority in West London who have come to me and said, look, we can't build the houses that we need because the housing developers who are building big blocks now want electric vehicle charging

points, which they have to have. That's a planning regulation. They have to move, in this case, to air source heat pumps to reduce the reliance on gas. So their total domestic power consumption is at least doubling and some. And so suddenly these people wanting these big blocks are saying, well, we now can't get the power because we're in the queue behind the data center people. And so the planners are saying, well, we're not going to give permission to build the data centers if the data centers are gobbling up the power and we can't house our people. So there's a huge number of effects of all of this. And what we're trying to do is very much bring the end users to the table with the public authorities and say, look, how do we sort this

out together? All of these people want to be using social media. They all want to use the benefits of data centers. But we've got to coexist well together. So we're trying to do that at the moment, bring some of these groups together. So things like district heating systems is one thing that we're looking at. Heat as a byproduct of the data center, feed it into a district heating system, put it into these blocks of flats and reduce their power load as a result. And it's a lot more environmentally friendly. So there's loads of stuff that we're doing, which I never would have dreamt of being involved with just two years ago. Yeah, great point. I love the, you hear in our industry, oh my gosh, you guys use a lot of power. Your industry is not green enough. You're not responsible enough.

And I think that the phrase data center, folks don't get what that means. So I try to tell folks all the time when they ask what I do for a living, I just say, hey, hold up your cell phone. That's what I do for a living. Everything that goes on in that phone happens in a data center, everything on your phone. And because I think to your point, folks don't want to get on Snapchat less or Instagram less or order their food less or chat with their friends less or order a ride or any of those things. They want all of that incredible convenience at the end of their hand. Well, that runs in a data center. That's what a data center is. And I think we as an industry have to do a better job telling folks, you know, we're the guts of everything you do right here. And you don't want to go back to a flip phone, I'm pretty sure. So let's figure out how to make this work together. Absolutely. I love this big picture stuff. This is so good, really, really helpful from an understanding and perspective.

Would you talk a little bit about what we might consider Tier 2 outside of Flat D? What's going on in the rest of the continent? I think of cities, whether it's Rome or Berlin or Prague or Madrid or Milan, any of the – what are some other things happening out there? So there's a heck of a lot happening. And certainly whilst our focus has always been front and center on the flap D markets, we're seeing as much growth in absolute terms in the tier two markets. And I'm reticent to call them tier two markets now. Just all of those other markets now are getting availability zones in them. So yes, Italy and Milan and Madrid in Spain, the Switzerland's are very well established.

But now we're starting to see the Belgians and the Finlands, Warsaw in Poland, Austria has got a zone announced. Greece, I mean, who would have thought it? But good on Greece. There's one there. Norway and Denmark, just I think we did top them up. And there's 55 open or announced cloud zones, public knowledge announced zones, 55 now in Europe, which is extraordinary. And if you go back two years, I don't know what the number was, but it was nothing like that.

It wasn't even close. Yeah. It was probably in the teens. Yeah. It was probably in the teens. Yeah, it was probably in the teens three years ago. So the journey has definitely gone from, yeah, okay, we're anchoring in these big markets. They were then starting to go into what we call the tier two markets at the time, and now all hell's broken loose and we're going everywhere.

Because at the end of the day, we've got latency issues and we've got data protection issues, which mean that if you want to provide the quality of service, which the big hyperscalers do, to government, big companies, as well as then some of the private individuals, you've got to be in region. And that's the thing that's created this localized demand. Yeah. Yeah. Boy, that's, yeah, I didn't even open the Appinger wide enough. I didn't think about it, right? Norway and Finland and Austria. I mean, it's going on everywhere. Not only the data sovereignty, data privacy, data protection, all of that, every country's got a

slightly different view on it. It's fascinating to see how quick it has gone, right? I mean, to your point, 55 announced cloud zones. I had no idea the number was that high. And just looking at that numbers-wise, Raymond, so I think by the end of next year, so end of 23, because we've got a really good line of sight to exactly what's been built. Anything coming on next year is under construction now. So for the end of next year, in those flap D markets, there'll be three and a half thousand megawatts of IT capacity in modern colo facilities um in that same period we think there's going to be another two and a half thousand megawatts in all of the other locations this is total um capacity that makes six gigawatts so three and a half in the flaps two and a half gigawatts elsewhere, six. And that is starting to get to be a huge number.

So if you look at that two and a half gig in the secondary markets compared to the flaps, you can make a hell of a living getting involved in that lot. To your point, I'm not sure we should call them secondary anymore. Two and a half gigawatts of capacity. Yeah, I mean, and to think about that we're looking at, you know, take Madrid, you know, a market that's probably going to be in the 250 or 300 megawatt range fairly quickly to the fact that we're saying that second tier two market. I mean, it's getting big everywhere. That's the simple way to say it.

It's shockingly big everywhere. Yeah. I think Madrid will be 170 odd, 172 megawatts, I think it is, by the end of next year. Yeah. Not far from a two and change, yeah. No, no, absolutely. At the end of 2021, it was 77. So it's a 125% increase over two years.

I appreciate it's coming from a relatively low base, but, you know, and that's 172 megawatts is a lot of megawatts. And, of course, it's growing. That's actually delivered capacity. Like in Milan, it will have gone from, I think, 85 to 150 megawatts. And even, you know, the likes of Marseille and Vienna, there'll be 50, 60, 70 megawatt markets. You know, that's where there's some real action taking place.

Yeah, yeah. Unbelievable. The numbers continue to be shocking everywhere. And we're really talking North America and Europe. There's a lot going on in Asia as well. And I think LATAM and Africa are coming not that far out either. I'm not going to broaden the spectrum of our conversation, but we're really talking North America and Europe. I mean, there's a ton going on in Africa. There's a ton going on in LATAM and a ton going on in Asia. It's truly incredible, the trajectory of

the industry that we both get to be in and certainly expect a little bit of a slowdown, but not in our space for a while, that's for sure. So, Martin, just my quick anecdote on Africa as you raised the subject was, and I went out there a few weeks ago, because a year ago, we had no data center, live instructions as CBRE there. Today, we've got nine. So we're either buying or selling land in nine specific cases. And it's not all South Africa, we're into Kenya, and a lot of the new markets. And I have to say, when I went out there, toured the Terrico facilities and things, which I last toured probably seven or eight years ago, and they are ginormous and they are a fantastic quality. It's exactly what you'd expect anywhere in a really modern location. So yeah, I think Africa is really interesting, but it's tough to do business there, hugely tough.

And it's a different world to mainland Europe from a doing business point of view. So yeah, it'll be fascinating to, I know perhaps if we speak in a year's time, see what's actually happened over there. Well, boy, we would agree with you. It has changed dramatically. We are doing work in Africa.

And to your point, it's not South Africa, right? You can't support the continent from South Africa. It is going to be multiple markets and a growing market. And when I think about the future of our industry, the future being 10 years from now. As I approach retirement, I think it's going to be an incredible market, Africa, just because it continues to modernize and continues to grow and their economies continue to grow. It's going to start to look like, just one personal anecdote, the first time I went to Africa on a mission trip,

I was fascinated. We fly in and land in a dirt runway and take a cart off into the middle of nowhere and walk into this village where we're staying for the week. And a woman walks up to me with her cell phone. And the town has no two-story buildings. It has no sanitation. It has no plumbing. It has no electrical generation. And I was like, how are you on a cell phone? And she's like, oh, we have a cell tower and it runs on a generator. And I was like, how are you on a cell phone? And she's like, oh, we have a cell tower and it runs on a generator and we all charge our cell phones off of car batteries. We just skipped over the landline phase because there was no point in building a landline network there. And I think we're going to get a little bit of that, right?

I think we're going to get that in the data center business where Africa is going to get the latest, greatest, and the best because they don't have to live through all the legacy of how we built our data centers here for the last 25 years. Yeah. I mean, it's that young, massive population. And there's an amazing map that one of my colleagues did where he had a map of Africa, and then he put the whole of the United States into it, the whole of China and the whole of Europe and they all fitted perfectly and there was plenty of space left over. And people, myself included, have absolutely no idea how big the place is. But that young population, high propensity to use technology and particularly cell phones, the issue is GDP. And so, you know, this is the big, big, big question is, you, at what point does their GDP take off, which will then allow the purchase of some of these more IT and data center heavy services? Anyway, we'll cover that one later. subject for us in the future. That's a good one. I completely agree with you. I think it's a fact

a lot of people don't know. Most maps, most maps of the globe actually shrink the size of the continent of Africa just to make it fit. And I will tell you, having been there and flown in small airplanes over the continent many, many times, it is so vast. It is unlike any place you ever have seen. The vastness of Africa is just unbelievable. So I know what our next podcast will be. We'll talk about the African continent and the markets there. Andrew, I really appreciate you taking time. This has been great. Always impressed with your knowledge and your professionalism and your experience and helping us understand the market a little bit better. And good luck to you and to CBRE,

our friends there, and to you and your family heading into the holidays. We always appreciate it. Thank you so much. Thanks, Raymond. Really appreciate it. It's been a pleasure. Awesome, Andrew. Thank you.