Does Server location has any effect on SEO?

This can be explained as the fact that while your host's server location use to play a partial role in the local search results the algorithms used by Google, they have downgraded a server locations relevance to in the past few years in favor of other targeting tools. 

"Server location (through the IP address of the server) is frequently near your users. However, some websites use distributed content delivery networks (CDNs) or are hosted in a country with better web server infrastructure, so we try not to rely on the server location alone."

What matters?

- Country specific URL's or ccTLD (Country code top-level domain)

- Google Web Master tools manual GeoTargeting tool

- Site language (if your site is Russian your target is probably Russia)

- Local Addresses and Phone Number (Google Panda takes these into account)

- Currency used in pricing 

- Google local business center (where available)

Clients choose hosting companies based on affordable price, quality customer service and reliability servers and CDN's. Google and other search engines know this so have downgraded the server location to only hold relevance when other factors like those listed above are missing, and even then it still does not hold the weight it use to. 

Server/host location has very little effect on your sites regional SEO ranking and in the hands of a good designer will have no affect at all. The use of Google web master tools and the factors mentioned above will play a much larger role in your rankings.