From the cybercriminal underworld to Europe’s leading home of data centres

The picturesque town of Traben-Tarbach, on a bend of the meandering Moselle river in the Bernkastel wine-growing district, is likely to become an unusual footnote in the story of Germany’s emerging role as a significant destination for data centres.

Here, in this unlikely spot, Germany’s Bundeswehr built a colossal underground bunker which served from 1978 to 2012 as the headquarters of its meteorological division. The bunker, which has no natural light, was five stories deep and had 6,000 square metres of floor space, with walls three feet thick and partly lined with copper to prevent eavesdropping. 

The self-contained structure, with its own heating, ventilation and power supply, was built to withstand a nuclear attack, and stored food provisions for three months survival, including a million litres of water. At its peak it housed 400 civilian contractors, predicting and tracking weather patterns in places wherever German military were deployed.

The bunker was built underneath thirty acres of fenced land that included outhouses, office buildings and barracks constructed by the Nazis in 1933. It had no obvious other uses than for some form of military or technological campus. So it was a blow when the Bundeswehr moved out in 2012 and moved to another site.

Germany’s federal real estate agency, the BIMA, had a difficult task in selling the complex for the advertised €350,000, but they ultimately found a buyer in an eccentric Dutchman called Xeent, who had a history of buying bunkers and offering ‘bulletproof hosting’ to websites. 

Over the next few years, the Cyberbunker on the banks of the Moselle would go on to become one of the world’s foremost traffic centres for data, with descriptions of the Dutchman’s office making it sound like the command centre of a James Bond villain’s global headquarters. The full story of the comings and goings surrounding the complex is now emerging as the case is the subject of a full criminal enquiry following a midnight raid by 650 armed police officers last year. Suffice it to say that the cast of characters associated with the operations at the Cyberbunker would fill a novel, and include Irish drug gang warlords, techno-anarchist fantasists, pornographers, and encrypted phone specialists, to name just a few. 

The raid brought operations to a halt and saw the arrest of the team surrounding Xeent, and the confiscation of billions of gigabytes of data that the prosecutors hope will bolster the case against the cybercriminals. Much of the prosecutors’s case – which has been delayed due to the coronavirus – will hinge on the extent to which the provider of servers is liable for the content of the data which is stored on behalf of clients worldwide (the Cyberbunker at one stage also hosted data for Wikileaks – before graduating to more lucrative hosting opportunities on the Dark Web, or even deeper).

The extraordinary saga surrounding Xeent and the Cyberbunker will no doubt be fleshed out further as the highly complex case winds its way through the courts. Residents of Traben-Tarbach and nearby towns such as Trier and Koblenz are still in a daze as they try to piece together their experiences with the ever-evolving cast of characters who were drawn to the services of the underground enterprise in their midst. We will be following developments with great interest.

One side-effect of the authorities’ growing understanding of the seemingly impenetrable world of server farms and mega-processing capacity has been to establish a framework for the installation and maintenance of data servers – for purely legitimate and above-board commercial reasons, we hasten to add. If anything, the coronavirus has accelerated the need for cloud computing, ecommerce and streaming services – and with it the demand for data centres, which offer huge new potential for alternative real estate investments.

Frankfurt am Main is emerging as the clear beneficiary of this new demand, with several new mega-projects recently added to the pipeline. With over 30 companies currently running more than 60 data centres in the city, Frankfurt is becoming the German internet’s capital city. Its proximity to the banks, who have an insatiable thirst for superfast data processing, is a not unwelcome additional benefit. 

The adoption of DE-CIX Frankfurt for network interconnection services rather than routing data via American exchanges has helped lay the groundwork for what could be massive future growth (The DE-CIX has just set a new world record of more than 9 terabits per second of data transfer). Dutch-headquartered data centre provider Interxion, which has just signed on a new deal in Frankfurt for more than €1bn, says that data traffic will increase fivefold between 2017 and 2025 – to 163 zettabytes - and the city of Frankfurt is determined to become a major player in helping that to happen.

Real estate experts, engineers, technicians, due diligence advisers – scores of professionals are now rapidly beefing up on their competence to understand the intricacies of this very specific asset class. We’re not talking price per square metre here, it’s all about megawatts, renewable energy resources, environmental controls, and computational fluid dynamics. Hardened real estate pros are having to learn a new language to discourse on the subject.

But best of all - in contrast to the Cyberbunker on the Moselle, this fastest-growing real estate segment is evolving with the full support of the authorities, including Frankfurt’s planning department at the highest level. Interxion is just one of many major developers taking on huge projects in the city, including the massive 110,000 sqm ex-Neckermann headquarters. Cromwell European REIT (with a 300 megawatt project) and CyrusOne Inc, with its fourth project in Frankfurt, are just two other companies to announce major new investments in the city in the last few weeks. There’s a lot more to come.