News / From the associates

The European data center market is experiencing significant growth, but challenges related to the availability of land and energy resources could prompt operators to rethink their strategies.

According to a CBRE report, in 2024 Europe recorded a record 655 MW of new capacity, marking a 17% increase compared to 2023, despite obstacles in the development of new facilities. In the fourth quarter alone, supply increased by 297 MW, with 51% allocated to primary markets such as Dublin (62 MW), Frankfurt (56 MW), and Paris (34 MW), while rapidly expanding secondary markets added 145 MW, led by Oslo and Berlin.

Demand for space exceeded supply for the fourth consecutive quarter, with record absorption of 341 MW in Q4 and 706 MW for the full year, marking the seventh consecutive year of growth. Cloud expansion by hyperscalers (large cloud service providers that manage large-scale IT infrastructure, such as AWS, Microsoft Azure, and Google Cloud) and the growing demand for artificial intelligence capacity are accelerating demand, but the lack of adequate power and infrastructure in the FLAPD markets (Frankfurt, London, Amsterdam, Paris, and Dublin) could push operators toward new destinations.

Pre-leased contracts accounted for 66% of total European take-up and 71% in secondary markets, with 90% of secondary take-up (262 MW) concentrated in Berlin, Madrid, Milan, Oslo, and Warsaw, confirming the growing interest in these cities.

The vacancy rate in Europe fell to 10% in Q4, the lowest level on record, and to 8% in the FLAPD markets. If this trend continues, the vacancy rate in Europe could fall below 10% for the first time by 2025, settling at 8.5%. The growing shortage of suitable space is already pushing some operators to occupy less attractive facilities in order to secure the necessary infrastructure resources.