The data center business is on the rise. Proof of this is the vigorous growth that lives on quarkSpanish architectural and engineering consulting firm data centers. Headquartered in Madrid and led by Ricardo Abad and Miguel Gallego, this company is behind the Inditex technology rooms in its data center in La Coruña and the Interxion or Equinix centers in Madrid, two of the world’s leading service providers. placement (Data centers hosting other companies). It also works or has done so with companies like GMV or BBVA, among others.
Who is a quark?
We are an engineering and architectural firm dedicated exclusively to consulting, building design for data centers and construction management. This year we expect to have 13 million invoices compared to 5.7 million in 2021, approximately 130% more. Earnings also grew, although we don’t give that number. In the last three years we have doubled the size of the company by six thanks to the explosion in the data center sector in Spain, where we are the leader with a 60% share. We are behind most of the projects that are announced. We work with the four largest data center operators in the world, Equinix, Digital Realty (formerly Interxion), NTT, Cyrus One and also with others such as Nabiax or Prime Data Centers. We are behind almost all of the US investments that come to Spain or Portugal, where we also operate, although we cannot cite some of them due to confidentiality.
How many people work in the company? Is it 100% Spanish?
Yes, we are 2 partners, both Spanish. We have been working in this sector for 25 years and with the company since 2009. In 2014 the Brazilian company Aceco TI bought it from us, but in 2016 we bought it back. We now have 60 employees and have another 20 people who work with us regularly to accommodate peak periods of work. We are the largest engineering company in Southern Europe specializing in data centersWe are among the five largest companies in Europe in terms of turnover.
In addition to working with giants Data CenterThey are also behind data centers like Inditex, for example.
We certainly don’t just work with cloud location operators; We also have corporate and management clients. We have been given, for example, the Social Security Treasury data center, in Syria, and the new Xunta de Galicia data center, which is ready for delivery. At the corporate level, we have many customers, although there are fewer and fewer because almost all of them go to the cloud. The most important is Inditex, with whom we have been working around the world for ten years.
We are now working in Spain and Portugal, but plans are to enter Germany, Italy and France next year
Are companies moving to the cloud hurting Quark?
No, because for many years we have been committed to companies that provide the infrastructure for other companies to provide their services. They are companies whose business is to create and rent centers, and we thought that they would be larger projects than those of companies, moreover, they would repeat because their business model is this: when they fill one position, they open another. So, on the contrary, this migration to the cloud has favored us a lot, because that’s where we have complete control. comp placement They are more demanding in their procedures and demand more, and this is a barrier to entry for other engineering firms in Spain.
In which countries do they work?
In Spain and Portugal, although we only have an office in Madrid, because we are a completely digital company. All of our design processes and procedures are being moved to the cloud, which we did during the pandemic. The only part we do face to face is running the business. But now we are preparing for our expansion in other European countries. We’re looking at Germany, France and Italy. We are looking at the strategy to take, if we do it through alliances or through buying small businesses, and depending on that we will need financial support or not. We hope to be ready to operate in some of these countries in the second half of 2023, because our existing clients, who are mostly multinational companies, are demanding to travel abroad with them.
How do you see the data center market in Spain?
Spanish Association for data centers, Spain D.C., in December 2021 that the projections were going to be 600 MW in 2026 from the 100 MW installed now, but we think we’ll go to 1,000 MW of capacity, given the number of projects being announced in recent months. For example, the one in Meta in Talavera de la Reina, with an investment of 1,000 million, or the Capital Energy investment, with 3,000 million, in two data centers in Castilla-La Mancha. Or else in Catalonia from Aquila Capital 300 million in a Data Center in Barcelona. And it all adds up.
How many projects are you working on now?
We have ten concurrent projects in the design and management phase, nine in Spain and one in Portugal.
How long do you anticipate this drawdown in data center investment?
there is a lot to do. Although the current growth figures are surprising, if we look at how many MWs were rented in the US in the first six months and how many in Europe as a whole, the difference is 10 to 1. According to data from JJL, in the US in the first half of the year They rented 1,000 megawatts, which is about 2,000 megawatts a year; This is equivalent to renting everything in London and Amsterdam in a year. This tells us that despite Europe’s best efforts, there is a long way to go for at least 10 years. Also missing is the part of the displacement towards secondary cities, which has barely begun.
It is a sector where demand is expected to continue to rise and where long-term tenants are; This generates certainty for the investor
In Spain, almost all centers are opened in Madrid.
Yes, but they are already starting to invest in Barcelona and Valencia is starting to stand out, because the submarine cable that runs from Africa to Spain will be docked at both locations. And in it, Aquila Capital, Interxion, Equinix, Merlin, Nethits, which we’re working on, and Kio Networks have already made announcements. Little by little they will reach more places, such as Bilbao or Malaga.
These centers consume a lot of energy. Does the energy crisis affect the sector? Is there a delay in the centers for this reason?
no. It is true that they consume a lot because there are many services concentrated at the same point. If we compare a data center where 100,000 video calls are supported, it is clear that the building consumes, but less than if we had 400,000 people traveling for 100,000 meetings. It is an industry in which electricity is 40% of its operating expenses, but it is also true that it is precisely for this reason that it is One of the industries most committed to sustainability. It is the only sector in Europe that has imposed itself, without being mandated by any directive, to be carbon neutral by 2030.
Does Quark incorporate elements into the construction of these centers to make them more sustainable?
Yes, we work on circular economy issues. There is a project we are working on where the concrete that will be used to build the centers is recycled concrete, resulting from the demolition of another former building, and wood has been started in some parts. Some initiatives of a social nature are also being launched. We have a client, whose identity I cannot disclose, who is going to build a data center with recreational areas that will be shared with the entire city where he is located. In some cases, they put beehives in favor of pollinating the environment.
The Data CenterIt has become one of the most attractive real estate assets for investment.
completely. Most of the companies in this space listed in the US, namely Reits companies (socimi in Spain), have an ebitdas account of more than 50%. It is a very high return sector, with long term contracts. It’s a sector where demand is expected to continue to rise, because digital services continue to grow, and they have a high visibility that it’s going to have long-term tenants, because it’s very difficult for a customer that’s hosted in a data center to go to another because of the investment that it will entail, This generates a lot of certainty for the investor.
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