Frankfurt, London, Amsterdam and Dublin data centre markets set to reach 1,000 MW by 2023

There was a monumental £23.5bn investment into the data centre sector for the first half of 2020, despite the impact of COVID-19, according to Knight Frank's research. This is over four times the $5 billion annual average figure and a colossal increase on last year’s $2 billion investment volumes. Take-up in H1 2020 was also 50% higher year-on-year at 282MW.

The findings highlight the rise of the ‘Gigawatt markets’ – data centre markets where total supply of IT power is expected to exceed 1,000 Megawatts in the next three years. Current Gigawatt markets are Frankfurt, London, Amsterdam and Dublin.

The report also highlights that Madrid, Copenhagen and Warsaw have emerged as the fastest growing European markets with over 700MW of enterprise hyperscale and build-to-suit developments between them in planning or active development. This comes as data centre developments expand outside of traditional hubs to create smaller clusters including Amazon developing 300+MW in Spain, and leading technology companies Google, Facebook and Apple developing new schemes in Copenhagen, combined with announcements of new cloud regions in Poland, Milan and Madrid.

It is clear most demand for more or new data centre space and power is Cloud led and Knight Frank is seeing an increasing migration from on-premise server storage to Public Cloud, most notably within the financial sector.

Stephen Beard, Partner and Head of EMEA and APAC Data Centres at Knight Frank, said: “We are pleased to launch a pioneering report on the European data centre market, which demonstrates the growth and increasing significance of the sector with investment and take-up increasing year-on-year. Our research identifies the rise of the European Gigawatt markets with London and Frankfurt leading the charge as well as identifying key opportunity markets including Madrid, Copenhagen and Warsaw.

“There are often a lot of assumptions made in the market, typically based on how countries have delivered in the data centre sector in the past.  A number of these new findings will challenge that thinking. We predict that the sector will only continue to grow in importance, particularly given the increased remote working and digitisation of companies as a result of the COVID-19 pandemic.”

Ed Galvin, Founder and CEO of DC Byte, added: “Key points to note from our perspective is that the technology giants are increasingly self-building which has the potential to rapidly change the data centre landscape as they move away from the short-term flexibility of the colocation model. At the same time, build-to-suit is becoming more prevalent as colocation operators tap into hyperscale demand.  The Data Centre report also finds that data centre developments are regionalising out from the traditional core markets, and new smaller data centre hubs are emerging in response to increased user demand for new technologies and services. This will undoubtedly impact where the smart investment money goes.”

Knight Frank expects that the European data centres market will mature and expand over the next year and that 2021 will see at least a 10% increase in Cloud and wholesale take-up levels owing to further adoption and migration to public cloud in the short term. It predicts that even those markets that appear to be underperforming in this report, in particular Paris, will see increased development activity in the rest of 2020 and into 2021.