You are walking along the pavement, enjoying the sunshine, thinking about lunch, and a loony comes into sight. There's always one, counting manholes, whispering quietly and scribbling in a notebook. Don't turn around. Don't escape across the road. Sidle up and crib his notes. You could be a millionaire by next week.
In this high-tech age of wired cities and super-sophisticated telecommunications, multi-million-pound companies find buildings by tracing optic fibre cables hidden under the streets. They are a surging new category of occupier which store the computers linking companies into the Internet. Others are spending billions on this vast array of data cables. Linking the two, however, can be surprisingly old-tech.
'There are no easily-available, comprehensive maps,' says one agent, who keeps his own researches locked in a desk. 'You just go out and check the names on manholes.'
Companies buying this information are just as secretive. A dozen or so service central London while the country as a whole has 400 communications licence holders. Finding their 'switches' may require another street-by-street search. They are obsessed with security and tend not to put up signs.
Out in the sticks, cables tend to run along motorway verges, canals and railway lines, looping out to draw in surrounding areas via what are termed metropolitan area networks (MANs). Getting at them, however, is limited to 'nodes' or 'super points of presence'. Only rarely does a successful link creep into the headlines. Intel's 'server farm' at Winnersh, near Reading, was set up last year but did not leak into the Financial Times until the spring.
Cable & Wireless could hardly avoid being noticed when taking the vacant Galileo building outside Swindon, while IX Europe was guaranteed to grab attention by paying 14 pounds/sq ft for a building near Heathrow - 27% more than the asking price. Yet plenty more has quietly gone on as a raft of communications specialists build a new kind of service.
And this has merely scratched the surface, according to Paul Brown of CB Hillier Parker, who has followed the rise of the sector. 'In the US there are telehotels, which rent out Internet connections, in every major city,' he says. In the UK they can still be counted on the fingers of one hand.
Crispin Topping of Fuller Peiser admits that figures for take-up are still modest. 'There is an estimated 1m sq ft of demand in the pipeline in London, which will not exactly dominate the office market,' he says.
But this will increase as more business pours onto the Internet. Like roads, the more traffic, the slower its gets. Security is also a big fear. Specialists are emerging almost weekly with offers of dedicated, super-fast cable connections and high-security buildings housing rack upon rack of computers.
The potential is enormous. The market for Internet 'hosting' in Europe alone is expected to reach almost 1bn pounds by 2004, according to Sir Anthony Cleaver, chairman of IX Europe. Intel has estimated that only 5% of the servers needed to meet likely global demand by that time is currently in place. That is why the US firm is stuffing hundreds of its own computer servers into Winnersh.
The problem for the property industry is second-guessing where such demand will focus. High-speed optic trunk cables are the best indicator. No-one realised that four of these ran along Bath Road, Heathrow, until strange new names came knocking at Airport Gate, a warehouse developed by Allied Commercial, Kingswood Commercial and National Mutual.
IX Europe is so new that it was sent away with a flea in its ear while better covenants were canvassed. MCI Worldcom stepped in but a bidding war eventually saw IX paying 14 pounds/sq ft for space that had been on offer for 11 pounds, says Christina Banbury of Rogers Chapman
Suddenly, a new language emerged. IX is a 'neutral co-location facility provider'. In other words, it not only offers a safe home for computers connecting into the Internet, but a choice of different telecom companies. That was why four different cables in the road were so important.
The idea is not new: the 145,000 sq ft Telehouse in London's Docklands has been carrying the bulk of the UK's Internet for more than a decade. But deregulation of European telephone services, several new transAtlantic cables and the migration of business to the Internet have seen an upsurge of rivals. IX has a centre in the heart of the City offering connections to a dozen services. Others are scattered around the country, hidden by an obsessive anonymity that rules out even a nameplate on the door.
Mark Peach, a telecoms specialist at FPD Savills, estimates that 'housing and hosting' firms took almost 1.5m sq ft of former warehousing in the last year and a 'significant amount' is under offer. Before anyone rushes out to begin inspecting manholes, however, there are serious obstacles to overcome.
NEED TO KNOW
New operators are involved in mind-numbing amounts of space. Level 3, which is constructing an international cable network let more than 1m sq ft of 'gateway' facilities in less than a year and plans some 6.5m sq ft across the US and Euro.
Most of these newcomers are racing the clock. 'They want space yesterday,' says Christina Banbury of Rogers Chapman. It is not worth spotting a vacant site and offering a pre-let.
Then the problem of cultural differences rears. These fast-growing, US-owned, companies often have poor covenants and demand flexible leases. This gives British fund managers palpitations.
'The importance of using advisers versed in UK and US cultures cannot be underestimated,' says Paul Brown, who has been working with Michael Bronstein of CB Richard Ellis in Philadelphia to educate each side on the other's needs.
Brits need to appreciate how fast these operators work. They, in turn, must realise that the structural changes required to turn simple industrial and office buildings into high-tech complexes will frighten landlords. They need a credible team of consultants, designers and managers in place to give some credibility.
Money can talk very loudly, however. Rents are often a minuscule part of the equation, says Peter Honey of Jones Lang LaSalle, who guided Intel into Winnersh. The US group is spending around 90m pounds turning the old Hewlett Packard building into an international node. The premium rent at Airport Gate also palls beside a 3m pound fit out by IX Europe.
Picking the right building to offer can throw agents into confusion, as takeup has ranged so widely. Intel's Winnersh centre is a 15-year-old mix of office and warehousing; Global Switch has taken the futuristic former FT printworks in Docklands for its hosting centre; Globix has moved into a former Ministry of Defence office in London's New Oxford Street.
IX Europe's hub is an anonymous 800 sq metres hidden somewhere near Finsbury Square. Crucially, it is expandable to 2,500 sq metres to take the tripling of business expected from City firms.
'What is right for one is not necessarily so for another,' says David Vale of GVA Grimley, which put Cable & Wireless into its Swindon centre, another former office building. A mobile phone operator may take a relatively small, simple building as a switching centre. It can be run remotely, so labour is not a factor. Customers are important, however, and it will be placed where local network demand is high.
Telehotels like Globix, which is hidden on New Oxford Street, offer space for customers to house their own equipment, so they must be near enough for staff to visit, says Fuller Peiser's Topping. It is no coincidence that others are in London or around Edinburgh, while the search for for further possibilities is going on in major provincial cities.
Intel could have located anywhere between London and Cornwall along the line of the transatlantic cable trunks but it also needed to draw potential customers and impress them with its imposing 'command centre', looking down on a network of flashing lights and screens. That meant concentrating on areas like Docklands, Park Royal and the Thames Valley.
Cable & Wireless has ambitions beyond its former cable-laying role to create a million sq feet of web hosting space around the world. A 5,000-server unit in the US capable of receiving 700m web visits a day is the first of 20 data and host centres. The company has bought several Internet service providers in Europe and signed up with Compaq to provide computers.
C&W needed a European HQ quickly and plumped for the 12,260 sq metre (132,000 sq ft) Galileo building at Swindon. It had space, power supplies and was near trunk cables. But most importantly, it was available quickly.
COMMON FEATURES
Water, weight, power and security are common factors among the choices made by various types of user. The theoretical ideal is a desert-dry box, with a minimum 930 sq metres (10,000 sq ft) floor capable of high floor loading, a basement, massive power back-up, 10-metre eaves (or 4.5-metre slab-to-slab) and enough room for a double perimeter fence.
The ideal is just that, however. Such buildings rarely, if ever, exist within the time frame operators require. Telehouse could produce an ideal extension next to its Docklands HQ: Intel was forced into a 17-year old building
Keeping out water is critical with so much circuitry around. Some operators are understood to create false internal roofs to be sure. 'And you can't risk having water pipes,' says Andrew Jenkins of BT Property.
Keeping out undesirables is just as important. Every operator promises to seal their buildings against tampering, sabotage or information theft. Double fences and video-recording are taken as read.
Hosting centres can consume 10 to 15 times the power needed by a standard warehouse, says Mark Peach of FPD Savills. Computers eat a lot of electricity, as do the cooling systems necessary to keep systems running.
Operators guarantee continuous connections, which demands dual power input for each computer rack, says Crispin Topping of Fuller Peiser. That means batteries to cope with short supply breaks, emphasising the need for high floor-loading capacity already strained by the weight of these racks, adds Peter Honey of JLL. Standby generators cope with longer breaks.
Developers can find themselves persuading electricity suppliers to boost circuits, freeholders to allow tenants to hack into floors and planners to accept potential disturbance from generators.
JARGON BUSTER
Telehotel, Co-location Facility, Server Farm, Hosting Centre: Overlapping terms for top-security buildings filled with hundreds of computers linked to the Internet. Used by individual companies, telecoms carriers and commercial Internet suppliers. Sizes range from 10,000 sq ft in this country to 500,000 sq ft in the US. Variations involve supplying all the computers or offering space for clients to install their own. 'Neutral' hosting centres are fed by several cable networks and offer choice of telecoms carriers. They tend to be in or around large towns, where these cables converge.
Switch centre: Smaller and more like a telephone exchange. These link mobile and fixed line carriers into trunk cable networks.
Data centre: A new breed of hosting centre acting as an archive or Internet back-up facility. Evolving into application service providers (ASP) from which companies access programs and data over the Internet rather than store them locally.
Internet Service Provider (ISP): Provides remote access to the Internet.
Super-POP: High-performance access point to fibre optic trunk cables. Critical for telehotel locations.