A worldwide shortage of available power is holding back growth of the global data centre market, according to research from CBRE.
Despite new development, vacancy rates dropped across the globe to an all-time low of 4.8% in the first quarter of this year from 8.6% the year before.
Strong demand for data centres is being driven by the rapid growth of artificial intelligence along with other tech, such as streaming, gaming and self-driving cars.
Across the top European markets, Frankfurt, London, Amsterdam and Paris had a combined 316MW of positive absorption over the year to 31 March, with 256MW of that total absorption tracked in Frankfurt and London.
Leasing availability decreased by 17% over the year across these four markets, with 146.1MW available in London at the end of Q1, compared with 187.8MW last year.
Kevin Restivo, data centre research director at CBRE, said: “Demand for capacity in absolute terms has never been higher across the top five markets in Europe.
“Conversely, there is a shortage of available power to varying degrees in those markets and many other key European metro markets, which is making it difficult for data centre providers to meet that demand.”
CBRE expects prices for data centre capacity to continue to tick up. Frankfurt and London already have the highest rates in Europe, with further growth expected to be driven by the higher operational and build costs. Lack of available inventory in Europe’s largest markets is another key factor contributing to higher rates.
London’s monthly pricing range for 250-500kW, without electricity cost, stood at between $150 (£115) and $185 (£142) as at the end of Q1.
Andrew Jay, head of data centre solutions for Europe at CBRE, said: “Strong demand for data centres is driving the response of the supply pipeline.”
Northern Virginia in the US leads CBRE’s global rankings, with 2.1 gigawatts of supply recorded in the first three months of 2023, up 20% year-on-year.
This is followed by London, where data centre supply grew over the year to 956MW in Q1 versus 869MW last year. Vacancies dropped to 15% from 22% in London year-on-year.
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