Chapter 8
Data Centres
European Real Estate Market Outlook Mid-Year Review 2025
January 2025 Forecast
Significant new supply to be added in 2025
Despite a distinct lack of available power, data centre supply across Europe's five largest markets is expected to grow by a record 20% year-on-year in 2025. London and Frankfurt are expected to account for 2.5GW of capacity, or approximately half of the total data centre supply in Europe, by the end of 2025. They are forecast to be 1.3GW and 1.2GW markets, respectively.
Mid-year review
- Most new supply in Europe (70%) will be delivered to the five largest markets – FLAPD (Frankfurt, London, Amsterdam, Paris, and Dublin) this year. Nevertheless, there will be seven secondary markets registering over 100MW of supply. Four years ago, there were no secondary markets of 100MW or more. This demonstrates that data centre investment is increasingly diversified in Europe.
- We forecast that new supply will grow by 17% across Europe year-on-year in 2025, based on our analysis of the 15 top European data centre markets.
January 2025 Forecast
Vacancy rates to hit historic lows
The vacancy rate in Europe is expected to close at 9% in 2025, a new low. The top 15 European data centre markets combined have traditionally seen a double-digit vacancy rate. However, available space is expected to decline for the fourth consecutive year, given strong demand for capacity and the difficulties providers are having delivering new stock due to the lack of available land and power for data centres in Europe.
Mid-year review
- European average vacancy rates are now projected to decline to 7.6% by the end of this year, having declined to 10% for the first time as of end-2024. This means that since 2020, the average European vacancy rate will have halved.
- Demand will continue to outstrip supply in most major European markets and vacancy rates will fall further in 2025.
- Hyperscaler, High-Performance Computing, AI, and requirements from new companies offering GPU services and quantum computing will all add to data centre demand in 2025 and beyond, ensuring that vacancy rates will fall to below 6% in FLAPD.
January 2025 Forecast
Rents will continue to increase
Pricing for data centre space suitable for hyperscalers is set to climb by 10% or more in some markets where there is strong demand, such as Frankfurt and London, in 2025. Prices for new available capacity are expected to jump so providers can account for higher build costs. The shortage power means that operators with availability can charge a premium rental rate.
Mid-year review
- Monthly rental rates (excluding power usage costs) have increased in Europe as a result of restrictions in supply and rising demand. As the number of options for scalable multi-MW capacity are limited, cloud service providers have had to accept an increase in rental rates.
- Operators have also raised rates, partly to reflect the rise in costs to build new data centres.
- In 2025, more operators are equipping their facilities with liquid cooling to accommodate high-density AI workloads, which is another factor in rising rates.
Record take-up expected in Europe
Despite lower availability, demand will hit a new high
Although available capacity is on the decline, take-up is expected to reach 854MW in 2025 and exceed new supply in Europe for the third consecutive year.
We project that the five largest markets in Europe (FLAPD) will account for 75% of take-up across the 15 European markets tracked by CBRE this year.
London and Frankfurt, the two largest colocation data centre markets in Europe, will account for more than 40% of the expected take-up.
Developer-operators are increasing data centre capacity around the major cities to create more supply. These data centres can be as far as 40km away from some of the largest data centre clusters in the primary markets of Europe.
Secondary markets are also advancing
The secondary (non-FLAPD) markets are also increasing new supply as they grow rapidly from a low base. Of all the secondary markets, Milan has combined new supply growth with a rapid increase in take-up, resulting in a decline in forecast vacancy levels to 2.5% by the end of 2025.
Although the other secondary markets have higher vacancy rates than Milan, nearly all are experiencing a decline in availability.
As availability declines in Europe, organisations in need of capacity are deploying in smaller cities as well as the larger, more established markets.