Europe's Data Center Boom: Record Capacity Roll-Out Expected in 2025

As the digital revolution continues to sweep across Europe, the demand for data center capacity is surging, with CBRE predicting a record roll-out in 2025. The global leader in data center operations has released a comprehensive report detailing the state of the industry and the trends shaping its future. Let's delve into the key findings and explore what this means for investors.

CBRE's report highlights several factors driving the explosive growth in data center capacity across Europe:

1. Strong demand from hyperscalers and AI providers: The increasing demand for colocation data center space from hyperscalers and AI providers is outstripping new supply, leading to a lack of available space and higher prices in some markets.
2. Growth in AI and high-performance computing services: The demand for AI and high-performance computing services is driving the need for more data center capacity, particularly in areas with low-cost renewable power.
3. Lack of available power and land: The scarcity of available power and land in major metro markets is inhibiting data center growth, but providers are looking to smaller markets and the Nordic countries for opportunities.
4. Increased adoption of cloud services: The growing adoption of cloud services by businesses is driving the need for more data center capacity, as companies look to outsource their IT infrastructure needs.
5. Record supply growth in leading markets: Despite the challenges, data center supply in Europe's leading markets, such as Frankfurt and London, is expected to grow by a record 20% year-on-year in 2025, with these two markets accounting for half of the total supply.

These factors, combined with the increasing demand for digital infrastructure and the ongoing trend of digital transformation, are driving the record data center capacity roll-out in Europe in 2025.



The increased supply of data center capacity in Europe is expected to have a significant impact on pricing and demand dynamics in the market. CBRE reports that data center supply in Europe is expected to grow by 282MW in 2024, setting a new record. However, demand for colocation data center space is projected to outstrip this supply, with a take-up of 706MW in 2024. This supply-demand imbalance is likely to put upward pressure on pricing, with providers increasing prices by 10% or more in some markets to account for higher build costs and a lack of available space.

Despite the challenges, the European data center market remains a promising investment opportunity. The strong demand from hyperscalers and AI providers, combined with the increasing adoption of cloud services, ensures that the market will continue to grow. As an investor, it's essential to stay informed about the latest trends and developments in the data center industry to make strategic decisions and capitalize on the opportunities that arise.

In conclusion, Europe's data center market is poised for a record roll-out in 2025, driven by strong demand from hyperscalers and AI providers, the growth of AI and cloud services, and the increasing adoption of digital infrastructure. While challenges such as the lack of available power and land may inhibit growth to some degree, the overall demand for data center capacity remains high. As an investor, it's crucial to stay informed about the latest trends and developments in the data center industry to make strategic decisions and capitalize on the opportunities that arise.