European data centre power capacity is set to rise by 21% to approximately 13,100 MW by 2027, according to the latest research from Savills.
The firm also predicts that total international bandwidth usage in Europe will rise by a 31% compound annual growth rate (CAGR) by 2030 and that the growth of the data centre market will be evenly spread across Europe.
It said that growth would primarily be driven by the impact of artificial intelligence (AI) on the industry, with the European AI market expected to grow at an annual rate of 15.9% (CAGR 2024-2030).
According to Savills, 94 new European data centre projects will be delivered in the next four years, offering approximately 2,800 MW.
Scott Newcombe, EMEA head of data centres at Savills, said: “Despite the high number of new data centres anticipated to be built by 2027, the market is expected to remain largely undersupplied across Europe. Given the projected expansion of internet bandwidth usage, European data centre capacity needs to triple by 2027 and reach around 22,700 MW in power so there remains a significant supply/demand gap.
“We believe that prime yields, currently standing at 5-6% on the continent, will remain stable for most of the year, with a slight inward movement towards the end of the year as market dynamics evolve.”
Lydia Brissy, director in Savills’ European commercial research team, added: “Given the combined challenges of energy infrastructure, sustainability initiatives, scale expansion, and mitigating obsolescence risk, the data centre industry will require significant capital expenditure. As a result, rising private equity flows are anticipated in the market as the industry seeks to invest in its core business.”
