Summary:
1. The North American market has reached a record low vacancy rate of 2.3 percent, which is projected to continue decreasing until 2027.
2. Grid connection wait times for power in North America are now averaging four years, posing a significant challenge in addressing the shortage of colocation capacity.
3. Major markets like Columbus, Ohio, Austin/San Antonio, Northern Virginia, Dallas, and Atlanta have seen significant growth in data center capacity since 2020.
Article:
The North American market is currently experiencing a historic low in vacancy rates, dropping to just 2.3 percent. According to JLL, this figure is expected to continue declining or remain at the same level until 2027. This significant decrease in vacancy rates is a stark contrast to the 9.8 percent vacancy rate seen in 2020, indicating a high demand for data center capacity in the region.
While the wait for data center capacity is a challenge, the wait for power connections is even more concerning. The average wait time for a grid connection across North America has reached four years, as reported by JLL. This delay in obtaining power connections poses a significant hurdle in addressing the shortage of new colocation capacity in the region, impacting the expansion of data centers.
Major markets in North America have witnessed substantial growth in data center capacity since 2020. Markets like Columbus, Ohio, and Austin/San Antonio have seen growth rates of 1800% and 500% respectively, albeit starting from a smaller base in 2020. In absolute terms, Northern Virginia, Dallas, and Atlanta have seen the largest increase in capacity, with Northern Virginia leading the way with a capacity increase of 3,975 MW. This growth reflects the increasing demand for data center services in these key markets.
Overall, the North American market is experiencing a surge in demand for data center capacity, leading to record-low vacancy rates and significant challenges in obtaining power connections. Major markets have seen substantial growth in capacity, highlighting the need for continued investment and expansion in the data center industry to meet the growing demand for digital services.
