Press Release
Demand for European Data Centres Outstripped Supply Last Year Despite Rising Rental Rates
February 16, 2024
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Demand for colocation data centre space outstripped supply in 2023, despite facilities of unprecedented size being delivered across Europe for the industry’s largest customers.
According to new research from CBRE, there was 601MW of take-up across the 14 largest markets in Europe in 2023. In contrast, 561MW of new supply was delivered in the same period, marking the second time in five years that take-up exceeded new supply in Europe. Both take-up and supply increased when compared to the previous year. In 2022, there was 546MW of take-up and 550MW of new supply delivered in Europe, representing increases in 2023 of 10% and 2% respectively.
Take-up in the leading markets, Frankfurt, London, Amsterdam, Paris and Dublin, led to the imbalance across Europe in 2023. In Q4 2023 alone, take-up soared to 252MW, a 41% increase when compared to the previous quarter (179MW). This was largely due to pre-let capacity that was delivered in Dublin, London and Paris.
Demand has grown for capacity despite the difficulties data centre providers are having sourcing power and available land for new facilities.
Hyperscalers have sought increasingly larger facilities that are tailored to their needs for some time. As such, the average size of new wholesale facilities in Europe has grown dramatically over the past two years and will only accelerate. However, there are fewer deals being struck by data centre providers with their largest customers.
Demand in Europe will only accelerate given that artificial intelligence (AI) workloads are expected to generate higher demand for capacity, as organisations look to enhance their operations by leveraging machine learning algorithms. For the meantime, the challenge remains the lack of available power and AI-appropriate facilities across Europe.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2024 revenue). The company has more than 140,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.co.uk.