The Artificial Intelligence (AI) revolution is about to send the data centre market into overdrive, with experts predicting a doubling of demand in just four years. This unprecedented surge could spell a golden opportunity for investors ready to cash in on the next big thing in property.
Forget London, Head North!
Savills, the international real estate experts, have crunched the numbers and the message is clear: Northern Europe is the new frontier for data centres. Why? Because these AI powerhouses are energy hungry, and places like Malmo, Gothenburg, Stockholm, and Oslo have the juice to keep them running.
Savills looked at 68 locations around the world and found that energy is the biggest roadblock to building new data centres. Big cities, already grappling with huge energy demands, are struggling to keep up. That’s why smaller cities, especially those with access to renewable energy, are set to become the new hubs of the digital world.
Location, Location, Location? Not Always!
While local demand will always be a factor, the rise of cloud-based services like AI means data centres are becoming less tied to specific locations. This is great news for investors, as it opens up a wider range of potential sites.
Paul Tostevin, Head of Savills World Research, explains: “Locations where limitations are fewer and time to market is faster are likely to benefit from the current unstoppable need for more capacity… We’re seeing some trends in the fastest-growing markets being close to those which have limited capacity, such as Malaysia, which is boosted by its role in supporting demand from constrained neighbouring Singapore; a pattern which is beginning to emerge elsewhere in southeast Asia.”
US Data Centres Feel the Heat
The US is facing the same challenges as Europe, with power constraints putting the brakes on new data centre projects. Rick Drescher, head of Savills Critical Facilities in the US, says: “The rulebook of data centre site selection has been ripped up; it now all comes down to where sufficient power can be accessed.” While traditional hubs like Northern Virginia, Chicago, and Dallas are feeling the strain, developers are already eyeing up new territories like San Antonio-Austin, where power is more plentiful.
Europe: A Green Data Centre Revolution
The AI boom isn’t just changing where data centres are built, it’s also driving innovation in green technology. In Europe, strict regulations and growing demand for sustainable solutions are pushing data centre operators to invest in energy-efficient designs and renewable energy sources. This means your investment won’t just be profitable, it’ll be helping to build a greener future too.
Scott Newcombe, Head of Data Centres at Savills EMEA, sums it up: “AI is significantly transforming European data centre markets by driving increased demand for processing power and storage capacity… This surge leads to the expansion of existing data centres and the construction of new ones, fostering innovations in energy efficiency and cooling systems. Moreover, with stricter regulations on data protection and sustainability, data centre operators in Europe are investing in green technologies to meet compliance requirements and consumer expectations. Overall, AI is shaping a more robust, efficient, and environmentally conscious data centre landscape across EMEA.”
The AI revolution is here, and it’s creating a gold rush in the data centre market. With the right information and a keen eye for opportunity, you can be part of this exciting new chapter in property investment.