Demand for colocation space in Europe’s data centers is outpacing supply, a new report has warned.

Despite an abundance of new facilities being built for customers across the continent, the additional space will not be enough, the report from real estate company CBRE says.

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Facilities in the FLAPD markets, like Equinix's FR8 data center in Frankfurt, are in high demand – Equinix

The company’s European data centers report for the fourth quarter of 2023 shows there was 601MW of take-up across the 14 largest markets in Europe in 2023. In the same period, 561MW of new supply was delivered. CBRE said this is the second time in five years that take-up exceeded new supply in Europe.

Both take-up and supply increased when compared to 2022, when there was 546MW of take-up and 550MW of new supply delivered in Europe, representing year-on-year increases of 10 percent and two percent respectively.

Take-up in the FLAPD markets - Frankfurt, London, Amsterdam, Paris, and Dublin - is the main source of the imbalance, the report said. In Q4 2023 alone, take-up soared to 252MW, a 41 percent increase when compared to the previous quarter (179MW). This was largely due to the pre-let capacity that was delivered in Dublin, London, and Paris.

Kevin Restivo, head of European data center research at CBRE, said: “Hyperscalers have sought increasingly larger facilities that are tailored to their needs for some time. As such, the average size of new wholesale facilities in Europe has grown dramatically over the past two years and will only accelerate. However, there are fewer deals being struck by data center providers with their largest customers.”

New developments continue to be announced across Europe, particularly in the FLAPD. Earlier today, DCD reported on Global Switch’s plans for a new data center in London. The five-story facility, which will be known as London South, will offer 40MW across 27,000 sqm (290,625 sq ft).

This month also saw Mercury hand over a 19MW data center in Paris to Digital Realty, a facility which comprises 12 data halls and will be known as PAR9.

Andrew Jay, head of data center solutions at CBRE, added: “Demand in Europe will only accelerate given that artificial intelligence (AI) workloads are expected to generate higher demand for capacity, as organizations look to enhance their operations by leveraging machine learning algorithms.

"For the meantime, the challenge remains the lack of available power and AI-appropriate facilities across Europe.”