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The report identifies artificial intelligence (AI), hybrid cloud adoption, and the relentless demand for data as the primary forces propelling growth in the global data centre market. As enterprises seek scalable, high-performance computing solutions, data centre operators are responding with rapid expansion and innovation to meet bespoke customer needs.
Power availability, sustainability imperatives, and regulatory complexities are becoming increasingly influential in shaping investment decisions.
While demand continues to outstrip supply, the market is witnessing strong investment activity, particularly in Tier 2 and Tier 3 cities, which offer alternative locations with more accessible land and power infrastructure.
Regional Insights
EMEA: Major data centre hubs such as London, Frankfurt, Amsterdam, Paris, and Dublin (FLAP-D) remain critical, but developers are expanding into emerging markets including Lille, Düsseldorf, North England, Lisbon, and Bilbao. Power constraints and regulatory pressures are key concerns.
APAC: The region is set for aggressive expansion, with strong investor interest in both primary and secondary markets. High-profile acquisitions, such as Blackstone’s purchase of AirTrunk, underscore the sector’s appeal. Cities like Melbourne, Chennai, and Osaka are emerging as key locations alongside established hubs in Sydney, Mumbai, and Tokyo. Unlike EMEA, where power constraints and regulatory hurdles are dominant challenges, APAC markets face unique obstacles such as fragmented regulatory frameworks, land scarcity, and infrastructure limitations. However, the region's rapid AI adoption and increasing cloud demand position it as a crucial growth driver for global data centre expansion.
North America: Home to nearly half of global live IT capacity, North America continues to dominate the sector. AI-driven demand is tightening vacancy rates, driving up rental costs, and accelerating the development of new powered-shell facilities.
Sustainability and the Future of Data Centres
Sustainability has transitioned from a priority to an imperative. Data centre operators are adopting renewable energy solutions, advanced cooling technologies, and efficient infrastructure designs to align with global climate goals. Regulatory frameworks are also evolving, introducing stricter environmental and cybersecurity requirements.
Stephen Beard, Global Head of Data Centres Development & Investment at Knight Frank, commented:
“The data centre market is at a pivotal moment, experiencing unprecedented demand driven by AI, cloud computing, and digital transformation. While challenges such as power availability and regulatory complexities persist, the opportunity for investment, innovation, and sustainable expansion has never been greater. Knight Frank’s global platform, combined with our deep market insights, positions us uniquely to guide investors and operators through this evolving landscape.”
