Top European Data Centres Markets on Track for Record Year

It is expected that there will be a record amount of take-up in Frankfurt, London, Amsterdam, Paris and Dublin (FLAPD) data centre markets in 2023, according to the latest research from global real estate advisor, CBRE.

CBRE expects there to be 480MW of take-up across FLAPD markets in 2023, with more than half (56%) to materialise in Frankfurt and London. Hyperscalers are expected to be responsible for the majority of demand this year despite weaker economic conditions and slowing growth of their respective cloud operations.  

As a result, a comparable level of supply will be delivered to accommodate this. CBRE expects operators to deliver 524MW of capacity in 2023, with a flurry of notable megaprojects due for completion in London, Paris and Frankfurt in the second half of the year.

This follows a muted Q1, with just 2.9MW of supply coming to market, the lowest amount of new supply delivered in any given quarter for over 11 years.  

The lack of new supply coming to the market had a direct impact on demand in Q1, with take-up dropping to 28MW, a fraction of total take-up from the previous quarter (202MW). More than half of Q1 take-up was realised in London (17MW) with a single, hyperscaler deal accounting for the majority of this.

We expect momentum to gather over the year in the FLAPD markets as operators deliver facilities to meet growing levels of demand. As a result, we are on track for unprecedented levels of new supply this year, much of which we expect to be pre-let to single tenants, notably in the tech sector.

Kevin Restivo, Director, European Data Centres Research, CBRE