In its latest report, the international consulting company Cushman & Wakefield has identified the most popular emerging locations for data centres in Europe - this group of cities includes Berlin, Reykjavik, Oslo, Warsaw, Zurich, Milan, Vienna, Madrid and Prague.
The European data centre market has long been dominated by the so-called FLAP-D markets, which include Frankfurt, London, Amsterdam, Paris and Dublin, i.e. cities with extensive business and financial sectors. FLAP-D markets are still key to the data centre ecosystem as entry points - they are building facilities with a capacity of more than 500 MW - but interest in them is currently adversely affected by physical constraints, including a lack of energy to power data centres, limited supply and the need to operate. closer to regional users.
Due to these constraints and in response to operators' demand from customers across the region, new locations have emerged in the data centre market. The COVID-19 pandemic has only accelerated this trend as millions of people continue to work from home, which translates into increased demand and opportunities in secondary markets.
Stephen Kirby, Partner, Data Center Advisory Group, Cushman & Wakefield, said: “Rising land prices, limited energy availability, a temporary halt to data centre construction in some FLAP-D markets, and demand for high-speed fibre connections have made hyperscale vendors relocate through data centres from traditional markets to locations closer to their customers. The move has spiked activity in emerging data centre locations - cities that could be classified as the core for any other type of property. Many different pension funds, sovereign investment funds, infrastructure funds and private equity firms see investment potential in data centres and are looking to enter the European market."
Kevin Imboden, Research Director, Data Center Advisory Group, Cushman & Wakefield, said: “The enormous energy demand of data centres is driving investment growth significantly in markets that can harness reliable, low-cost green energy sources such as hydropower. Consequently, there is a growing interest in markets such as the Nordic countries, which also have the advantage of being close to efficiently operating business hubs. "
The cities listed in the European Secondary Markets: The Growth Story for the New Decade report are at the forefront of emerging markets - each with its own local ecosystem of cloud providers, developers, investors and tenants. Among the analyzed cities, Reykjavik (212 MW), Berlin (199 MW), Warsaw (128 MW), Oslo (125 MW) and Zurich (117 MW) may become the largest secondary data centre markets in the next five to ten years. The largest increase in capacity compared to the current level will be recorded in Berlin (+ 342%), followed by Reykjavik (+ 308%), Oslo (150%), Warsaw (+ 100%), Zurich (+ 89%) and Milan (+ 56%).