Trident International

Europe’s data centre market is moving through a period of extraordinary expansion. Artificial intelligence (AI), cloud computing and digital transformation are driving demand at a pace not seen before in real estate. Europe’s data centre capacity will almost double by 2030, reaching a value of around £72bn. The UK government has pledged to triple capacity by the end of the decade.

Policymakers are backing this growth with significant investment. The EU has earmarked €200bn (£176bn) through its InvestAI programme, while the UK has committed £1bn to scale up its public computing capacity. But alongside investment come structural pressures. AI workloads require high-density computing, placing great pressure on existing infrastructure, with Goldman Sachs predicting that global power demand from data centres will leap 165% by 2030.

The challenge is not only to build faster but to build smarter. That requires collaboration

The UK is focusing on AI infrastructure clusters with a capacity of 500 megawatts or more, highlighting the need for robust power sources and scalable solutions. Traditional hubs such as Frankfurt, London, Amsterdam, Paris and Dublin – the ‘FLAP-D’ markets – face grid bottlenecks and planning delays that stretch connection times well beyond seven years. Without reform, half of Europe’s investment could shift to new locations where power and land are more available. While the FLAP-D hubs will remain important, secondary markets such as Italy, Spain and the Nordics are drawing hyperscale demand as they can provide faster access to the grid and better renewable integration.

Centres of attention: the Netherlands is one of the established data centre markets facing new challengers Credit: Shutterstock/ Mauvries

For developers, this raises two critical issues: where to build the next wave of data centres and how to do so in a way that balances scale with sustainability. The answer lies in rethinking the development model and setting clear priorities for power, sustainability and flexibility.

Grid access has become the number-one determinant of success. Developers can no longer focus solely on securing land; they must forge long-term partnerships with utilities and governments to accelerate connections, upgrade networks and integrate renewable supply.

When it comes to sustainability, commitments such as the Climate Neutral Data Centre Pact are reshaping expectations on energy efficiency, waste-heat reuse and recycling. Treating sustainability as a core design principle, rather than a compliance exercise, will be critical.

Flexibility is also key, as hyperscale operators increasingly require bespoke approaches, whether that is powered land, powered shell or modular construction. Developers that can adapt to customer requirements, regional policy and investment structures will be more resilient.

This is where experience from other parts of the property sector becomes valuable. Developers with a track record in logistics and complex real estate are moving into digital infrastructure, applying lessons learned from big industrial projects to the demands of data centres. Experience gained in logistics, where site selection, infrastructure integration and supply chain efficiency are critical, translates directly into the demands of digital infrastructure.

The next decade

Five themes stand out for the decade ahead. First, AI will reshape facility size and density, driving demand for new forms of capacity. Second, power constraints will dictate the pace of growth, with grid access the critical bottleneck for expansion. Third, sustainability pressures are mounting, pushing innovation in design and operation and embedding efficiency and resilience as standard rather than optional features. Geographical preferences will become more fluid as demand shifts to markets with faster grid connections and stronger renewable potential. Finally, policy frameworks will be decisive in determining whether Europe attracts the next wave of investment or risks seeing it flow elsewhere.

The challenge is not only to build faster but to build smarter. That requires collaboration. Governments must address bottlenecks in grid planning. Utilities companies need to accelerate investment in renewable generation and transmission; developers must innovate in design and delivery; and investors must be prepared to support infrastructure that balances resilience with responsibility.

Europe’s digital future will not be built in isolation. If policy, power and planning can be aligned, the region will be well positioned to support the rapid adoption of AI, cloud computing and the digital economy. If that alignment fails, growth will shift elsewhere. The opportunity is enormous, but so too is the responsibility to deliver infrastructure that is sustainable, scalable and future-proof.

Richard Wellbrock is managing director, data centres, at Panattoni