2023 finished as a record year in terms of market growth, tightening vacancy rates and rapid absorption in the data center space. With interest in cloud expansion and the deployment of artificial intelligence, data center developers have rushed to seize ever larger sites with available power. The stage is set for a 2024 full of newly rising markets and novel solutions to the lack of power.
Absorption picked up velocity in the latter half of the year, with most markets beating H1 2023 totals and year end numbers have generally exceeded 2022 totals. Much of the absorption took the form of the delivery of pre-leased and built-to-suit projects, driven in no small part by the desire of hyperscalers to build out capability to handle both the computation and storage of artificial intelligence deployments across a host of verticals.
Power availability became an even larger constraint on further development, with multiple major utilities limited commitments to 2 - 5 year timelines. Anecdotally, several markets are seeing requests for power that greatly exceed current planned generation projections let alone distribution infrastructure. Major players have correspondingly adjusted their strategies, opting for larger site acreages and power purchase agreements far earlier in the development process. Many of these agreements are now being signed directly with third party energy generation developers, with wind, solar, battery storage, natural gas and even geothermal developments moving quickly across markets. With larger upfront land and power commitments, data center developers will have greater leeway to phase in campuses at their own pace without constrictions from either unavailable power or searches for additional sites.
Growth in both established and emerging markets continues, as hyperscale demand seeks to expand existing cloud regions while also capture less latency critical sites for AI learning facilities in more rural areas.
Key markets featured in this report include:
| North America: | Latin America: | ||
|
|
|
