Global data centre real estate analysis platform datacenterHawk has released its 1Q 2023 Data Center Market Recap reporting on the high demand and ongoing challenges across the North American, European, Asian-Pacific (APAC) - and for the first time, Latin American (LATAM) - markets. This follows its 4Q 2022 recap, which reflected on the high demand in 4Q that helped fuel the data centre industry’s historic growth in 2022.
datacenterHawk’s data and analysis details the current trends and challenges across the data centre sector’s major markets.
The team relies on its proprietary standardised methodology to provide real time data that allows subscribers to discover, track and compare trends and pricing from over 35 individual markets across North America, Europe, and APAC regions.
“We anticipate a fascinating year of development in the data centre industry. Market analysis will play a crucial role as key stakeholders navigate the challenges of power limitations, supply chain issues, and rising costs, all while demand for data centre infrastructure remains strong,” comments David Liggitt, datacenterHawk’s President.
“We’re also excited to have expanded our global coverage in the new year, and provide our expert analysis on the development of leading Latin American markets.”
Global data centre market highlights include:
North America: While still active, demand in North America cooled after multiple record-setting periods of absorption between 2020-2022. Absorption remained high, however, recording the 6th largest quarter ever. Many enterprise users are currently favouring a conservative strategy regarding their IT infrastructure, with some opting to renew their leases at shorter terms, likely in anticipation of less volatile pricing in the near future. Emerging secondary markets continue to experience vast growth, as developers are seeking new markets that offer similar benefits to major hubs, but at more favourable costs, and power availability.
Europe: Data centre capacity demand remained consistent in 1Q 2024. Many European countries are adjusting their operations, strategies and policies regarding data centre practices in an effort to increase data sovereignty, privacy, and security. Power supply also remained a challenge, limiting leasing and development in areas such as Amsterdam, Dublin, and London. As a result, markets where power is more readily available grew significantly within the last year, including Paris, Madrid, Milan, and the Nordics. Looking forward, providers that can procure power and have a clear path to develop new space will have an advantage in many of these constrained markets.
APAC: The region’s geography presents a unique challenge, as different regions have their own distinct climates, infrastructure systems, power grids, and other logistical factors that make development challenging. Despite obstacles, Singapore and Hong Kong are undergoing major developments as the demand for cloud services rapidly increases, though high demand has limited some options for future development. Although development has slowed in recent quarters, datacenterHawk projects an upward trend toward the latter half of 2023, as new funding and projects move forward, which will help to alleviate the region’s low vacancy rate and drive future leasing.
LATAM: The LATAM market is currently experiencing a surge in growth, due in large part to strong industry tailwinds, including technology adoption and data centre investment. Prior to the pandemic, international hubs such as Dallas, Miami, and Los Angeles primarily serviced the region's data centre needs, as most local enterprises had not yet outsourced their IT or undergone digital transformation. Today however, Latin America is expected to see the highest global growth in technology adoption. datacenterHawk reports this will spark regional demand for colocation in key LATAM markets such as Mexico, Brazil, Chile, and Colombia over the coming decade.