JLL

European data centre demand rises by a third in 2021

23 March 2021 | Abigail Opiah

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JLL forecasts a 21% increase in new data centre capacity with 438MW to be added to established markets this year, according to the company’s data centres report.

The data centre report found that increased cloud migration and technology adoption drove unprecedented activity in the data centre industry in 2020.

Take-up in Europe’s main data centre markets of Frankfurt, London, Amsterdam, Paris and Dublin (FLAP-D) increased 22% year-on-year reaching 201.2MW, with this pace of growth expected to continue for the rest of 2021.

This year alone, JLL forecasts 438 MW of new supply being added to the FLAP-D markets, a 21% increase on the total market size.

“Widespread lockdowns, social distancing, and home-based working have transitioned many everyday activities from the physical to the digital,” said Jonathan Kinsey, Head of EMEA Data Centre Services, JLL.

“This has boosted demand for digital infrastructure, including data centres with many organisations needing to accommodate elevated consumer demand and expectations like never before.

“The growth of Europe’s data centres will continue to accelerate, largely driven by hyperscalers and technology players and we project that take-up will rise by around a third in 2021.”

JLL found that despite a slow start to 2020, enterprise colocation demand picked up in the second half of the year across Europe.

Take-up in London increased by 72% with 87MW seen throughout the year. Frankfurt also had a record year for absorption with 69MW of deals and 124MW of headline signings, and significant growth in new supply placed Frankfurt as the largest mainland colocation provider in Europe.

“In 2021, we expect to see traditionally non-data-centre investors and developers actively explore opportunities in the sector either to back start-ups with good management teams or in some form of M&As and partnerships,” said Tom Glover, Head of Data Centre Transactions, EMEA, JLL.

“Demand in major European markets has continued to outstrip supply and the opportunities to enter the market will be varied. Most investors tend to focus more on the hyperscale segment, given its scalability.”

The construction pipeline in Europe is also expected to see significant growth following record levels reached in 2020, according to JLL.