Data center real estate - statistics & facts
As global IP traffic grows, so does the need for infrastructure to support it. In recent years, the growing demand for data centers has increasingly attracted the attention of real estate investors. In 2023, the value of data center investment amounted to about 7.5 billion U.S. dollars. According to a survey among industry professionals, data centers are one of the real estate investment assets with the best prospects in Europe in 2024. Whether it is cloud, colocation, or managed data centers, one thing is for sure: with digitalization accelerating and the increasing adoption of artificial intelligence (AI), growing the data center infrastructure will remain in focus.
The digital economy continues to expand rapidly, fueled by the transformative potential of AI. Yet, unleashing that potential will depend on the successful growth of data center infrastructure and capacity.
Which are the leading data center markets worldwide?
Undeniably, the largest data center market in the world is the United States. In 2023, North Virginia, the data center capital of the U.S., boasted close to 2.5 gigawatts of power capacity or nearly half of the total inventory of the top eight markets: Northern Virginia, Dallas/Ft. Worth, Silicon Valley, Chicago, Phoenix, New York Tri-State, and Atlanta. In comparison, Europe’s largest data center market, London, had one gigawatts of data center power supply. Other major European markets are Frankfurt, Amsterdam, Paris, and Dublin. Looking at the Asia Pacific region, Shanghai led the ranking with almost 1.6 gigawatts of live data center power supply, followed by Tokyo and Singapore.Focus on the U.S. data center market
Despite their growing popularity, the data center investment market in the U.S. is significantly smaller than other property types such as offices, retail, or industrial and logistics. That makes data centers an attractive alternative asset class to those who seek to diversify their real estate portfolio. In the occupiers market, the soaring demand and insufficient supply have led to a two-digit percentage increase in rents for two years in a row. Since 2021, data center construction has soared, showing that investors and developers have recognized the growth potential, and new inventory is planned to enter the market in the coming years.The digital economy continues to expand rapidly, fueled by the transformative potential of AI. Yet, unleashing that potential will depend on the successful growth of data center infrastructure and capacity.
