Vacancy rates in the European colocation data centre market are forecasted to fall below 10% by the end of 2024, owing to an expected surge of demand to close the year.
According to CBRE, the vacancy rate in Europe is expected to fall to 9.7% by year end. At the end of Q3, it stood at 11.9%. Across the top five markets, Frankfurt, London, Amsterdam, Paris and Dublin, the vacancy rate is already below 10%, currently sitting at 9.4%.
If that expectation comes to fruition, it will be the first ever time that the European annual vacancy rate has closed in single-digit territory.
Two factors have led to the decline of availability: hyperscalers’ strong appetite for data centre capacity coupled with the difficulties providers are having securing the necessary resources to build facilities.
Take-up regularly exceeds the supply delivered in most large European metro markets. Annual take-up, which CBRE believes will reach 705MW, is expected to exceed the expected level of new supply at 644MW, and the vacancy rate is set to fall further this year in the 15 European markets that CBRE tracks.
There will be an estimated 456MW of available capacity by year end in Europe; marking the lowest year-end total since 2018 when there was 359MW. However, in 2018, the entire market was just a third of the size of that in 2024, when it is predicted that 4.7GW of capacity will be delivered by the end of this year.
Kevin Restivo, head of European data centre research at CBRE, said: “With vacancy rates across Europe expected to drop to record lows, organisations are struggling to source the capacity required to support their growth plans. Given the lack of availability in primary markets, we are seeing some organisations turning to smaller markets as a solution. Buyers need to take a long-term view of the market if data centres are to be an integral part of their business and IT strategies.”
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