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EMEA report from JLL predicts strong data centre growth in secondary markets

Written by Thu 28 Mar 2024

Global real estate and investment firm, JLL, has found that secondary markets will drive data centre growth in EMEA.

In the report titled ‘Secondary markets to drive data centre growth in Europe in 2024’, the primary FLAPD markets (Frankfurt, London, Amsterdam, Paris, and Dublin) will see continued growth of 16% in 2024.

However, the real opportunities for data centre operators and investors will likely lie in secondary urban markets like Madrid, Berlin, and Warsaw.

“In a world increasingly fuelled by the internet, data, and artificial intelligence (AI), demand will continue to rise for real estate to make it all happen,” said Tom Glover, Head of Data Centre Transactions, EMEA at JLL.

“Data centre demand shows no signs of deceleration. Power availability and increasingly tough sustainability performance regulations and reporting requirements are beginning to drive activity in Europe’s secondary markets,” added Glover.

According to JLL, EMEA data centre projections include growth of 39% for Berlin, 54% for Madrid, and 59% for Warsaw.

Rather than a rebound from a slow 2023, these projections build on strong performance in secondary markets in 2023.

For example, in 2023, Madrid saw a 27% increase in market size, with data centre providers adding 23MW of new supply. That amount could double in 2024, with an additional 46MW projected in Madrid this year.

Primary FLAPD markets will continue to see strong growth of 16%. This is similar to the expected 17% growth in tertiary (emerging) markets that have so far not been a focus for data centre investment.

In European primary markets, Frankfurt showed the fastest growth in 2023, adding 134MW of supply which is a 51% increase year over year.

“While we saw additional supply come to market, it is still struggling to keep pace with the staggering levels of demand for data centre capacity, creating an ongoing imbalance,” said Daniel Thorpe, Data Centre Research Lead, EMEA at JLL.

Thorpe added the company expects demand for space in 2024 will continue to be incredibly high, particularly in core markets, leading to low vacancy rates for new space and upward pressure on rents.

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Written by Thu 28 Mar 2024

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