The colocation data centre vacancy rate in Europe’s top five markets, Frankfurt, London, Amsterdam, Paris, and Dublin (FLAPD), has dropped below 10% for the first time in Q2 2024, amid sustained high demand for data centre space.
New research from CBRE revealed take-up, totalling 44MW, has surpassed the new supply of 30MW for the fourth consecutive quarter. This shift has led to a notable decrease in the vacancy rate across FLAPD, which now stands at 9.8%. CBRE has projected this rate to further decline to 7.9% by the end of the year, marking the fifth successive year of decreasing vacancy rates.
The strong demand for colocation data centres continues to be driven by hyperscalers, who are seeking to enhance their digital service delivery and maintain a competitive edge by securing sought-after capacity.
Despite this growing demand, data centre providers face significant challenges in accommodating new requirements due to the limited availability of power and suitable land in primary European markets. In cities like Frankfurt and Amsterdam, stringent regulations are complicating construction efforts.
Consequently, the demand for data centre space regularly exceeds the new supply introduced in major European cities. CBRE forecasts that 646MW of new data centre capacity will be added this year, while take-up across the 15 markets tracked by the firm is expected to reach 693MW.
“Data centre capacity is an increasingly precious commodity given the considerable demand for space and competition for it. Providers that can secure the necessary resources and build data centres are able to command higher prices for the space,” said Kevin Restivo, Head of European Data Centre Research at CBRE.
