datacenterHawk, a data center real estate analysis platform, revealed in its 3Q 2023 Data Center Market Recap that 1.4 GW of absorption and continued growth across global data center markets and power supply challenges worldwide.
Using its proprietary, standardized method, the datacenterHawk team provides real-time data to monitor trends and pricing across more than 35 markets in APAC, Europe, LATAM, and North America. datacenterHawk’s most updated data and analysis are available in its third-quarter summary.
“The global data center industry is experiencing strong growth throughout 2023, with increasing demand and the rise of AI requirements leading the development of new submarkets and opportunities in established and emerging regions,” stated David Liggitt, Founder and CEO at datacenterHawk. “We aim to help make sense of how these markets can best overcome challenges and where that might lead to future opportunities in a period of tremendous growth for the industry.”
The platform found that major Asian-Pacific (APAC), Europe, Latin America (LATAM), and North American markets experienced significant growth and absorption in 3Q, following datacenterHawk’s 2Q 2023 report of 1.7 GW for the first half of 2023.
In its report, datacenterHawk revealed that each market has its specific nuances of growth.
· Asia-Pacific: As significant hubs such as Singapore and Hong Kong continue to draw interest from hyperscale companies, demand for data center development in Asia-Pacific remains high. However, the firm pointed out that supply backlogs caused by challenges outside the region limit the region’s ability to create new capacity. Also, high absorption is leading hyperscale companies to develop large campuses independently. Despite limited supply, datacenterHawk expects future opportunities to alleviate some of the region's pipeline constraints.
· Europe: Europe faces the challenge of an ongoing power supply shortage, which has driven many companies to secure additional capacity now in anticipation of their future needs rather than wait until they need it. In addition, demand for space in Europe’s major FLAPD markets (Frankfurt, London, Amsterdam, Paris, Dublin) is growing despite the limited supply, leading providers to plan campuses at larger scales, often necessitating the acquisition and redevelopment of existing corporate campuses due to the scarcity of suitable greenfield sites.
· Latin America: Although the market saw a recent period of high demand, Latin American market growth economic challenges, supply chain issues and power constraints led to slower growth in the third quarter. Future hyperscale growth will help LATAM’s overall industry development, though challenges with AI implementation could keep the region’s development behind others.
· North America: In North America, campus development continues to be a significant driver, with the region’s developers opting to purchase large plots of land, up to thousands of acres, for long-term project planning. While absorption remains high across the region, which reflects the demanding requirements for AI and cloud growth, the rising demand for space and decrease in vacancy has led to increased costs. To overcome these challenges, datacenterHawk projects North America will see a higher spending of speculative capital and a more significant growth in its submarkets.
datacenterHawk's real-time market data can be accessed via its Insight Platform, featuring data center trends, activity, and pricing. datacenterHawk’s fourth-quarter 2023 Market Analysis is expected to be released shortly after the quarter ends.
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