Data centre investment on the rise in Europe

The need for data centre space to house equipment dedicated to Artificial Intelligence (AI) and cloud services is driving Europe’s largest colocation data centre markets to new heights, despite power shortages across the continent, according to a new report from CBRE.

AI-specific requirements are surfacing across Europe at scale, and meeting these requirements is likely to be a challenge for European data centre operators for some time, given difficulties securing the necessary power and land to build AI-ready facilities across the continent. 

“Power and land shortages, combined with increased regulation are the most prominent inhibiting factors when it comes to data centre development in Europe,” says Andrew Jay, Head of Data Centre Solutions, Europe at CBRE. “There are added pressures with ever-rising demand levels as a result of AI growth, underscoring the need for ongoing investment in development.”

CBRE’s Global Data Center Trend Report 2024 analyses key variables, such as total inventory, vacancy rates, net absorption, pricing and rental rates and availability in established and emerging markets across North America, Europe, Asia Pacific and Latin America. 

Rising rental rates are a key trend across Europe, primarily fuelled by higher data centre construction costs. Lower availability is also a factor, caused by a supply-demand imbalance in the primary markets. This is particularly prevalent in Amsterdam, where vacancy dropped to 11.5% in Q1 2024 from 19.4% a year earlier.  

Equally, emerging markets are attracting investment from companies looking to secure data centre capacity. Markets such as Oslo and Madrid are seeing rising demand for hyperscale-suitable capacity, and CBRE expects operators to drive additional investment in these markets.

“Secondary European markets are growing for a variety of reasons,” adds Kevin Restivo, Head of Data Centres Research, Europe at CBRE. “Hyperscaler ambitions and lower power costs have driven rapid growth of markets such as Oslo, given its accessibility and economic importance. In some cases, this makes them hotspots of data centre construction.”

Despite power shortages, data centre inventory continues to climb in key markets, supported by significant construction activity. However, pre-leasing is now common practice, making it increasingly difficult for companies to secure suitable space.

Fore more from CBRE, click here.

The post Data centre investment on the rise in Europe appeared first on Data Centre & Network News.

The need for data centre space to house equipment dedicated to Artificial Intelligence (AI) and cloud services is driving Europe’s largest colocation data centre markets to new heights, despite power shortages across the continent, according to a new report from CBRE.

AI-specific requirements are surfacing across Europe at scale, and meeting these requirements is likely to be a challenge for European data centre operators for some time, given difficulties securing the necessary power and land to build AI-ready facilities across the continent. 

“Power and land shortages, combined with increased regulation are the most prominent inhibiting factors when it comes to data centre development in Europe,” says Andrew Jay, Head of Data Centre Solutions, Europe at CBRE. “There are added pressures with ever-rising demand levels as a result of AI growth, underscoring the need for ongoing investment in development.”

CBRE’s Global Data Center Trend Report 2024 analyses key variables, such as total inventory, vacancy rates, net absorption, pricing and rental rates and availability in established and emerging markets across North America, Europe, Asia Pacific and Latin America. 

Rising rental rates are a key trend across Europe, primarily fuelled by higher data centre construction costs. Lower availability is also a factor, caused by a supply-demand imbalance in the primary markets. This is particularly prevalent in Amsterdam, where vacancy dropped to 11.5% in Q1 2024 from 19.4% a year earlier.  

Equally, emerging markets are attracting investment from companies looking to secure data centre capacity. Markets such as Oslo and Madrid are seeing rising demand for hyperscale-suitable capacity, and CBRE expects operators to drive additional investment in these markets.

“Secondary European markets are growing for a variety of reasons,” adds Kevin Restivo, Head of Data Centres Research, Europe at CBRE. “Hyperscaler ambitions and lower power costs have driven rapid growth of markets such as Oslo, given its accessibility and economic importance. In some cases, this makes them hotspots of data centre construction.”

Despite power shortages, data centre inventory continues to climb in key markets, supported by significant construction activity. However, pre-leasing is now common practice, making it increasingly difficult for companies to secure suitable space.

Fore more from CBRE, click here.

The post Data centre investment on the rise in Europe appeared first on Data Centre & Network News.