Strong H2 Expected for European Data Centre Market

It is anticipated that there will be 4GW of installed capacity in Europe’s top colocation data centre markets by the end of 2023, a 17% rise compared to the previous year, according to global real estate advisor, CBRE.

Paris is expected to be among the fastest growing European markets this year, with double digit supply growth projected in each of the remaining FLAPD markets (Frankfurt, London, Amsterdam and Dublin).

The growth is expected to be driven in part by a select number of megaprojects that are slated for delivery in Frankfurt and Paris. CBRE also expects London to account for about one-quarter of the installed capacity across FLAPD by the end of 2023.

The supply growth is notable given the difficulties developer-operators have faced securing a primary power source for facilities in key data centre development hubs across Europe.

Nevertheless, CBRE has forecasted 495MW of new supply will be delivered to the Frankfurt, London, Amsterdam, Paris and Dublin (FLAPD) data centre markets in 2023 with another (83MW) expected to be delivered to smaller, secondary markets of Europe.

Demand for the noted capacity remains strong across Europe, with significant portions already pre-let, expected to be pre-let, or built with potential occupants in mind.

Alongside projected supply growth, CBRE expects FLAPD market take-up to reach 480MW for 2023, an increase of 25% year-on-year when compared to 2022 (384MW).

The secondary markets of Europe are benefitting from sustained strong demand as well. Hyperscalers are increasingly looking to deliver services to local markets from in-country, as opposed to in-region, and this has led to new growth across markets beyond FLAPD. As a result, markets including Milan and Warsaw are experiencing rapid growth.

CBRE expects take-up in locations outside of the largest data centre development hubs to grow considerably, as securing power in key data centre development hubs across Europe becomes more pronounced.

Read the full report here.

Data centre capacity is an increasingly scarce commodity. Developer-operators are delivering new supply in greater amounts, yet vacancy rates are on the decline across Europe. This is a testament to the importance of data centres to the digital economy.

Kevin Restivo, Director, European Data Centre Research, CBRE