Ladies and gentlemen, gather round for some absolutely mind-blowing news. Brace yourselves, because the top five data center hotspots in Europe – Frankfurt, London, Amsterdam, Paris, and Dublin, also known as FLAPD – have hit a record-breaking vacancy rate of less than 10%. Yes, you heard that right. For the first time in history, these prime data center markets are filling up faster than ever due to an insatiable demand for space.
Picture this: in the second quarter of 2024, a mere 30MW of new space was introduced into the market, while a whopping 44MW was snagged by eager clients. As a result, the vacancy rate in Europe’s key data center markets has plummeted to a tiny 9.8%. Reports from CBRE’s data wizards even dare to predict that this rate could sink even further to a jaw-dropping 7.9% by year’s end. Unbelievable, right?
But what’s causing this frenzy, you ask? Well, it seems that the big players in the digital world – the hyperscalers – are clamoring for space in these data centers to continue delivering the digital services we’ve all grown reliant on. And it’s not just about meeting demand; these tech giants are engaged in a high-stakes battle to outmaneuver their rivals and secure prime real estate in the digital realm.
However, the real plot twist lies in the struggle of those who actually provide the space in these data centers. Finding sufficient power and land in the most sought-after locations in Europe to construct new data centers has become a Herculean task. Regulatory roadblocks in cities like Frankfurt and Amsterdam are further hindering the creation of new space, adding another layer of complexity to the already fierce competition.
In essence, the demand for data center space has reached astronomical heights, creating intense competition among those vying for it. Consequently, those fortunate enough to secure the necessary resources and construct new data centers have the power to command top dollar for their space.
Looking ahead, CBRE anticipates a monumental 646MW of new space to be introduced this year, with a projected 693MW of space being snatched up across the 15 markets they closely monitor. It’s a veritable jungle out there for data centers, with no signs of slowing down.
So, that’s the tale of how Europe’s foremost data center markets are filling up at an astonishing pace. It’s akin to a real-life game of musical chairs, with everyone scrambling for their piece of the data center pie. And with the tech behemoths and digital services hot on the trail of coveted space, it’s safe to say that this party is only just getting started. Brace yourselves, because the data center frenzy is far from over.
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