Colocation data centre space was in hot demand in 2023, even with giant facilities popping up across Europe for major players.
A new report by CBRE reveals 601 MW of space was leased in the 14 biggest European markets, while only 561 MW of new space opened. This marks the second time in five years that demand outpaced supply.
Both take-up and supply grew compared to 2022, but demand saw a steeper rise (10%) than new supply (2%).
The leading markets, Frankfurt, London, Amsterdam, Paris, and Dublin, fueled the imbalance. In Q4 2023 alone, take-up soared to 252 MW, up 41% compared to the previous quarter, largely due to pre-let capacity in Dublin, London, and Paris.
This surging demand comes despite challenges like power scarcity and limited land for new data centers.
Kevin Restivo, head of European data centre research at CBRE said: ‘Hyperscalers have sought increasingly larger facilities that are tailored to their needs for some time. As such, the average size of new wholesale facilities in Europe has grown dramatically over the past two years and will only accelerate. However, there are fewer deals being struck by data centre providers with their largest customers.’
Andrew Jay, head of data centre solutions at CBRE added: ‘Demand in Europe will only accelerate given that artificial intelligence (AI) workloads are expected to generate higher demand for capacity, as organisations look to enhance their operations by leveraging machine learning algorithms. For the meantime, the challenge remains the lack of available power and AI-appropriate facilities across Europe.’
