The 3Q 2023 Data Center Market Recap, published by datacenterHawk, a global platform for data center real estate intelligence, shows 1.4 GW of absorption, continuous expansion of data center markets throughout the globe, and power supply issues globally. DatacenterHawk’s 2Q 2023 projection of 1.7 GW for the first half of 2023 was followed by considerable growth and absorption in 3Q in major markets in North America, Europe, Asia-Pacific (APAC), and Latin America (LATAM).
According to David Liggitt, founder and CEO of datacenterHawk, “The global data center industry is experiencing strong growth throughout 2023, with rising demand and the rise of AI requirements leading the development of new submarkets and opportunities in established and emerging regions. In an era of unprecedented expansion for the sector, our goal is to assist in making sense of how these markets can best overcome obstacles and where that might lead to future opportunities.”
The datacenterHawk report’s highlights are as follows:
Asia-Pacific – Major hubs like Singapore and Hong Kong continue to pique the attention of hyperscale firms, indicating a significant need for data center expansion in APAC nations. However, the area’s capability to add additional capacity is being constrained by supply backlogs resulting from manufacturing difficulties outside of the region. High absorption is also pushing hyperscale businesses to build their own expansive campuses. DatacenterHawk anticipates that future prospects may ease some of the pipeline restrictions in the area, notwithstanding the low supply.
Europe – Due to the persistent lack of electricity in the region, many businesses have decided to acquire extra capacity now rather than waiting until they really need it. In the short run, this is merely making the capacity problem worse. Furthermore, the demand for space in the major FLAPD markets of Europe – Frankfurt, London, Amsterdam, Paris, and Dublin—is increasing despite the limited supply, which forces providers to plan campuses at larger scales. Because there are rarely enough suitable greenfield sites, this frequently means acquiring and redeveloping existing corporate campuses. Due to power limits in major markets, rising markets (like Berlin, Madrid, and the Nordic area) and FLAPD sub-markets (like Manchester and Leeds) will be the ones implementing AI in Europe. European markets may face delayed development timeframes because to power outages and the time it takes to demolish premises that are bought.
Latin America – Because of the region’s general economic difficulties, supply chain issues, and power limitations, growth in LATAM markets declined in 3Q despite a recent period of strong demand. Even while main markets like Querétaro, Mexico, had rapid expansion before the third quarter, they are now dealing with power outages and building delays. In spite of these challenges, LATAM nations keep putting enormous quantities of electricity into service with the intention of attracting more advancements. Even if AI is a driving force in other international markets, LATAM may need to assist AI deployment in secondary markets until 2025, at which point it is unlikely to be unable to do so. Going ahead, hyperscale growth will support LATAM’s overall industrial development, although the region’s development may lag behind others due to difficulties using AI.
North America – The region’s developers like to buy large parcels of land—up to hundreds of acres—for long-term project planning, and campus construction is still a key factor driving the market there. The region’s high absorption rate is a reflection of the strict demands for cloud computing and artificial intelligence. Nevertheless, expenditures have gone up as a result of the declining vacancy rate and growing demand for space. DatacenterHawk predicts that in order to overcome these obstacles, speculative capital expenditures in North America will increase, and the region’s submarkets will expand more rapidly.
The datacenterHawk team offers real-time data to analyze trends and price across more than 35 regions in APAC, Europe, LATAM, and North America by using its unique, standardized technique. The latest recent statistics and analysis from datacenterHawk may be found in this 3Q report.