The data centre sector grew over the course of 2022 across key EMEA markets, according to new data from Knight Frank, in partnership with DC Byte.
Knight Frank’s Data Centre Report, which focuses on 11 major markets across EMEA, found that aggregate supply grew by close to 1020MW last year, with cloud computing underpinning activity. London recorded ‘significant’ activity in 2022 with 98MW of capacity absorbed in Q4 alone largely due to public cloud securing multi-megawatt deals.
Ben Stirk, partner and co-head of global data centres at Knight Frank, said:“Although the past year has posed some significant challenges for the data centre industry, including political instability, disrupted supply chains, rising energy bills and skills shortages, the fundamentals, societal and organisational digital transformation, have continued to accelerate.
“Consequently, the data centre landscape across EMEA continues to evolve rapidly as operators compete to secure land, develop new sites and increase market coverage. We can expect expansion across EMEA to continue at pace in 2023, with the potential scalability of the emerging markets perhaps offering the greatest opportunities for new development.”
Stephen Beard, partner and co-head of global data centres at Knight Frank, added: “The strong performance of last year in fairly depressed wider economic conditions and future outlook of the sector will certainly have sparked further investor interest. While cap rates have increased across all commercial property sectors in 2022 largely as a result of rising interest rates, cap rates on data centres have not been impacted as heavily, but that shift in pricing may well now present the opportunity that ‘new to the market’ investors have been holding for. At Knight Frank, our transaction and valuation teams are expecting a busy 2023.”
