Summary:
- The data centre market is expected to grow by 177% by 2030, with a significant capital expenditure of £229 billion to support AI, cloud computing, and digital transformation.
- After a 36% drop in 2023, the market rebounded in 2024, with a surge in transaction volumes across single-asset purchases, portfolio acquisitions, and more.
- Regional highlights include North America leading in new capacity, followed by growth in Europe, Middle East & Africa, and Asia-Pacific markets.
Article:
The Rapid Growth of the Data Centre Market: A Closer Look
The data centre market is poised for significant growth, with projections indicating a potential expansion of 177% by 2030. This surge is fueled by a substantial capital expenditure of £229 billion over the forecast period, underpinning the increasing demand for digital infrastructure to support AI, cloud computing, and enterprise digital transformation.
In 2024, the market experienced a remarkable rebound after a 36% drop in data centre transaction volumes the previous year. This rebound saw a surge of 118% to £24.5 billion, driven by single-asset purchases, portfolio acquisitions, redevelopment opportunities, and development site sales. Globally, the average real estate transaction value in the data sector space increased to £59 million in 2024, reflecting a 15% growth from the previous year and a 44% increase from pre-COVID transaction values in 2019.
Regional growth highlights showcase North America as the dominant global market, with 11,638 MW in new capacity and a staggering £128 billion in capital deployed to support expected growth. Europe, Middle East & Africa (EMEA) is set to expand by 4,529 MW, while Asia-Pacific (APAC) is forecasted to see a 4,174 MW increase, supported by significant investments in both regions.
Key markets driving expansion include Ashburn in the USA, poised for a 58% growth with £26.7 billion targeting this market, Phoenix with a 126% surge attracting £12.2 billion, London set to expand by 36% with £5.3 billion of investment, Milan with a remarkable 168% growth rate requiring £3.4 billion, Tokyo poised for a 25% increase attracting £3.2 billion, and Johor in Malaysia emerging as a major data centre hotspot with an 85% growth rate underpinned by £3.7 billion in investment.
Stephen Beard, Global Head of Data Centres at Knight Frank, emphasized the rapid transformation of the global data centre industry, with a focus on sustainability, renewable energy adoption, and energy-efficient design. As the competition for prime development sites intensifies, stakeholders must navigate regulatory complexities, power availability concerns, and sustainability requirements to remain competitive in this high-growth sector. Operators, investors, policymakers, and partners all have a crucial role to play in shaping the future of digital infrastructure.
