EMEA data centre markets report record growth with 701MW take-up, says Knight Frank

The data centre market has seen a significant increase in demand over the past year, with the EMEA markets in 2020 seeing take-up rise 11 per cent higher year-on-year to a substantial 701MW, and a 19 per cent increase in new supply, totalling more than 1,589MW, according to the latest research by global property adviser Knight Frank, in partnership with DC Byte. 

The latest Data Centre Report challenges previous industry reporting on the scale of the EMEA regional market and looks at all data centres as an asset class, including both enterprise and colocation developments, across 17 key European markets. The report also highlights the accelerating growth of the challenger markets, which are emerging as data centre developments expand outside of traditional hubs to create smaller clusters. It cites that challenger markets experienced a take-up increase of almost 100 per cent and have been responsible for powering the performance of the sector, whilst the core FLAPD markets remained consistent in their growth levels. 

The core (FLAPD) markets of Amsterdam, Frankfurt, London, Paris and Dublin collectively equalled performances set in 2019 with 504MW, whilst take-up in the same time period outside of the core markets increased by 97 per cent at 197MW. Amsterdam led take-up growth in the core markets in 2020, with levels reaching 166MW, followed by London with 148MW, Frankfurt with 109MW, Paris with 68MW and Dublin with 11MW. 

According to the data, in the emerging markets Madrid was the fastest growing by take-up in 2020, with levels of 66MW nearly equalling Paris’s performance. Warsaw and Milan both performed well with an additional 180MW of supply added between them while the new hyperscale self-build market of Copenhagen saw 38MW of new take-up. Among the other high growth markets, Johannesburg saw 22MW of take-up and 38MW of new supply, while Moscow and UAE continued to see steady take-up with 14MW and 11MW respectively in 2020. 

There was also a record USD34.9 billion invested into the data centre and digital infrastructure sector globally in 2020, eclipsing the previous 2017 record of USD24.8 billion. 2021 looks set to be a strong year for investment into the data centres market, with USD13.5 billion of deals currently being tracked and expected to complete in the next six months. 

Ben Stirk, Partner and Co-Head of Global Data Centres at Knight Frank, says: “It is particularly exciting to see new smaller data centre hubs emerging in response to increased user demand for new technologies and services whilst shrewd investors seek opportunities to acquire and develop in both traditional and these challenger markets. We expect to see increased interest from both investors and real estate companies who are looking to capitalise on the strength of the sector and secure the long-term income it provides.  

Ed Galvin, Founder and CEO of DC Byte, adds: “Demand for data centre space and public cloud services has soared over the past year and this report demonstrates the underlying strength of the data centre market continues to gain momentum; growing exponentially, both in core and emerging markets.” 

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 per cent increase in Cloud and wholesale take-up levels owing to further adoption and migration to public cloud in the short term.  

Knight Frank has recently strengthened its market-leading data centres offering with the senior appointment of Ben Stirk as a Partner and Co-Head of Global Data Centres alongside Stephen Beard. The team has a strong global presence in the key FLAP-D markets in Europe, the core APAC markets of Singapore, Sydney, Tokyo and Hong Kong, and the main markets in the US, in addition to fast-emerging markets internationally. In the past 12 months the team has traded four data centre development sites with a combined total of 240MW in London, UK; Mumbai, India; Milan, Italy; and Sydney, Australia and currently has GBP1 billion of London land sales in the market.