This quarter’s Knight Frank report focuses on the EMEA region. Market analysis includes both established data centre hubs such as Frankfurt, London, Amsterdam, Paris, and Dublin; and emerging markets including Madrid, Sweden, Berlin, Denmark, Milan, and the UAE.

AI requirements and continued adoption of cloud services are driving demand in established markets and secondary markets to record levels. The markets covered in this report demonstrated an increase of approximately 2,953MW in aggregate supply over 2023, with Frankfurt and London seeing 744MW and 499MW respectively. Companies such as Microsoft, META, AWS and Google have all recently realised earnings for the end of 2023, with the principal theme being strong financial performances with AI acting as a major growth driver.

As AI applications become more prevalent across various regions, the demand for data centres to accommodate this surge will significantly increase. AI functions, especially AI training, require exceptional amounts of data storage and processing thus creating demand for larger, more powerful data centres. In line with this, Microsoft have announced that they intend to invest £2.5billion to develop AI infrastructures in the UK with Wales being a potential starting point for the company. London registered 56MW of capacity absorbed over the course of the year. Although Public cloud providers have accelerated the acquisition of sites for self-build, appetite for colocation space has not diminished, with hyperscalers leasing whole facilities in the market.

As at Q4, Frankfurt now has over 2.5 gigawatts of total IT supply, with just under 2,670MW. In Frankfurt international operators account for the majority of the power committed, with CyrusOne breaking ground on its fifth Frankfurt data centre in Hanau in Q4 which will offer 54MW of IT capacity. The market is witnessing larger deployments moving outwards towards peripheral towns such as Hanau, Offenbach and Hattersheim. Meanwhile, Paris has retained investor confidence with 117MW committed towards the market. Supply growth is primed to continue over the next few years with the likes of Blackstone and Digital Realty announcing a partnership for a future campus in Paris and Goodman announcing a data centre development to the northeast of the city.

In Southern Europe, Milan and Madrid continue to see a shift towards larger wholesale and hyperscaler self-build sites, driven by increasing demand for cloud services. In Madrid, AWS are building a three-site data centre campus in Zaragoza with each data centre comprising circa 40MW of IT power with growth potential. In Milan, supply has increased significantly with previously announced projects now in development. CloudHQ have started demolition onsite to make way for their 192MW campus west of Milan near Magenta.