Knight Frank has published its latest global data centres report, forecasting a 46% increase in data centre capacity worldwide by 2027, adding 20,828 MW. With projected capital expenditure reaching £229bn (€267bn) by 2026, the sector is experiencing unprecedented growth driven by AI, cloud computing, and enterprise digital transformation.
The market rebounded strongly in 2024 following a 36% decline in transaction volumes in 2023 due to global interest rate hikes. Investment surged 118% to £24.5bn (€28.6bn) across single-asset purchases, portfolio acquisitions, redevelopment opportunities, and development site sales. The average real estate transaction in the data centre space reached £59m (€69m) in 2024, marking a 15% rise from 2023 and a 44% increase from pre-pandemic levels in 2019.
North America leads the expansion, with 11,638 MW of new capacity requiring £128bn (€149bn) in investment. Europe, the Middle East & Africa (EMEA) is set for 4,529 MW growth, requiring £49.8bn (€58bn), with secondary hubs such as Milan and Madrid emerging due to power constraints in Frankfurt and London. Meanwhile, Asia-Pacific (APAC) anticipates a 4,174 MW increase, supported by £45.9bn (€54bn) in investment, with Tokyo and Johor, Malaysia, among the key growth locations.
Among the standout markets, Ashburn, USA, is projected to grow by 2,428 MW (58%), backed by £26.7bn (€31bn), while Phoenix is set for a 126% surge (1,109 MW) with £12.2bn (€14.2bn) in investment.
In Europe, London is expanding by 480 MW (36%), with £5.3bn (€6.2bn) committed, while Milan leads with 168% growth (310 MW) and £3.4bn (€4bn) in funding.
Stephen Beard, Global Head of Data Centres at Knight Frank, commented: “The global data centre industry is undergoing rapid transformation, with hyperscaler and colocation providers prioritising markets that offer access to power, robust connectivity, and a favourable regulatory environment. We’re increasingly seeing sustainability considerations shaping investment strategies, with an increasing focus on renewable energy adoption and energy-efficient design.”
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