European data centres in demand as vacancy rates fall below 10%

Data centre vacancy rates across Europe have dropped below 10% for the first time. According to data from CBRE, strong demand for space has seen the colocation data centre vacancy rate in Q2 2024 fall to 9.8% in Frankfurt, London, Amsterdam, Paris and Dublin. It expects the rate to fall further to 7.9% by the end of the year. The vacancy rate decline comes as take-up across Europe exceeded new supply for the fourth straight quarter. CBRE said interest from large cloud service providers, known as hyperscalers, remained particularly high, driven by the need to deliver digital services, as well as keeping sought-after supply away from their competitors. However, it added that providers were finding it increasingly difficult to accommodate given a lack of available power and appropriate land in the primary markets of Europe. Data centre construction is increasingly difficult in markets such as Frankfurt and Amsterdam, where regulation features prominently in development plans. As a result, take-up regularly exceeds the new supply delivered in most large European metro markets. CBRE anticipates 646MW of new supply to be delivered this year, and for take-up to reach 693MW across the 15 markets tracked by the firm. Kevin Restivo, head of European data centre research at CBRE, said: “Data centre capacity is an increasingly precious commodity given the considerable demand for space and competition for it. Providers that can secure the necessary resource and build data centres are able to command higher prices for the space.” Photo © yucelyilmaz/iStock