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Record growth in global data centre markets despite economic challenges

Verena Bauer • 21/05/2024
  • Cloud services and implementation of AI are fuelling demand for data centres
  • Energy, planning and space problems are slowing growth
  • Frankfurt has the second-highest data centre density in Europe after London

The latest “Global Data Center Market Comparison Ranking” from Cushman & Wakefield (C&W) reports strong growth in the global data centre sector across all regions and in both emerging and established markets. This is primarily driven by the increasing demand for cloud services and a growing interest in the implementation of artificial intelligence.

The study emphasises the dynamic expansion in America, where cities such as Atlanta, Dallas and Phoenix are experiencing significant leaps in growth thanks to their advantageous positioning and power resource availability. A similar dynamic is also emerging in emerging markets such as Kansas City and Nashville, which benefit from significant land resources and availability of renewable power.
In the EMEA region, the traditional centres of Frankfurt, London, Amsterdam, Paris and Dublin (FLAP-D) continue to struggle with energy, planning and space issues, but are still enjoying strong demand. London, the largest European market, remains in fifth place among the global top 10. A number of emerging markets are growing in the region, with interest growing in Southern Europe due to the intercontinental submarine cables and in the major Nordic cities (Stockholm, Copenhagen, Oslo and more rural areas) where renewable energy resources are widely available.

Tina Reuter, Head of Germany at C&W, on the situation in Frankfurt: “Even if local regulations limit the construction of new data centres, Germany’s major financial centre remains the most important telecommunications hub in Germany and the prime European centre of internet traffic and services. After all, it has the second-highest data centre density in Europe, after London, and the largest Internet hub in the world.” 

“In Germany in particular, the demand for land suitable for data centres is undiminished”, adds Simon Jeschioro, Head of Investment Advisory at Cushman & Wakefield. “In addition to traditional locations such as Frankfurt and Berlin, the search profiles of many operators are now also expanding to include locations in North Rhine-Westphalia as well as in and around Munich. The limitations on the availability of power continue to be the determining restrictive factors in Germany.”

In addition, ongoing hyperscale demand is putting strong pressure on the FLAP-D markets, which continue to grow despite the stated constraints. At the same time, development pipelines in Southern Europe and the Nordics are changing the data centre landscape as operators seek mega-scale powered spaces for cloud and AI and a fragmented topography emerges. “The appetite for data centre construction across the region is significant, with many investors interested in this attractive asset class.” observed Andrew Fray, Head of EMEA Data Centres at C&W.

“This robust growth underlines the strategic importance of data centres as a key sector of the digital economy and reaffirms investor confidence in this dynamic and future-proof sector.” concludes Tina Reuter.

Get the report: Global Data Center Market Comparison

 

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verena bauer
Verena Bauer

Head of Business Development Services, Germany • 60311 Frankfurt am Main

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