Largest Q2 on record for data centre demand in Europe

Author: Isha Jain

The period from April to June 2023 has seen record demand for data centres with 114MW of take up across Europe’s leading markets of Frankfurt, London, Amsterdam, Paris and Dublin (FLAP-D), according to JLL’s EMEA Data Centres Q2 2023 report. This is more than double the 51MW seen in Q1, and is the largest second quarter on record.

There was heightened activity for pre-lettings, with 141MW committed in Q2 alone, compared to 64MW in Q1. New supply continued to outstrip demand, with a total of 73MW of new space coming online in Q2.

Frankfurt led much of the momentum with 44MW of take up in Q2, bringing the year-to-date total to 80MW, in comparison to 26MW at the same point last year. In terms of supply, it has seen significant growth in 2023, with 69MW of new supply added in the first half of the year. Its colocation market has reached 656MW, with the total market size increasing by over 11% in the first two quarters alone.

London remains the largest market with a total of 902MW, amounting to a 35% share of total tier one supply. The city saw a significant drop in the amount of new supply added so far this year at only 7MW. However, the development pipeline remains strong with a string of new developments announced in Q2.

Paris has seen 24MW of new supply added so far in 2023, with a further 40MW due later in the year. Take up for Q2 hit 23MW, the single busiest quarter since JLL began tracking the data in 2016.

Dublin continued to see healthy levels of activity, with an additional 12MW added, increasing the overall market size by 6% to 199MW. Of the secondary markets, Madrid continued to grow, seeing a further 7MW of new supply, increasing the market size to a total of 97MW.

The growing demand for AI is driving the need for increased data processing speed and the high compute power required is leading to a fundamental change in the design of data centres, says the report. For the data centres used for training AI models, latency is less of an issue so proximity to the end user is not critical. These data centres can be strategically located where access to renewable energy, land and water is more readily available. As a result, JLL expects to see a ‘bring the data centre to the power rather than bring power to the data centre’ approach emerging.