Supply levels in Europe’s secondary data center markets are expected to reach record levels, according to CBRE.

The real estate advisory firm said 273MW of new supply is expected in secondary European markets this year. In 2022, secondary markets reached a record 228MW of capacity delivered.

The secondary European markets are Berlin, Germany; Brussels, Belgium; Madrid, Spain; Milan, Italy; Munich, Germany; Oslo, Norway; Stockholm, Sweden; Warsaw, Poland; Vienna, Austria; and Zurich, Switzerland.

European markets to grow by double digits

CBRE said the data center supply in eight of the ten secondary European markets will see double-digit growth this year.

Five of these markets are expected to have more than 100MW of supply, compared to just two of these markets at the end of 2022.

A report from JLL earlier this year also estimated that secondary markets in Europe would experience significant growth. JLL said Madrid, Berlin, and Warsaw would see an average of 49 percent increase in market size.

The growth in secondary markets is attributed to cloud service providers looking to provide services locally, as opposed to in-region, leading to growth beyond the FLAPD markets of Frankfurt, London, Amsterdam, Paris, and Dublin.

Kevin Restivo, head of European data center research at CBRE, said: “Growth of data center supply in secondary markets is expected to almost triple the European growth rate this year, with Milan set to become the largest secondary market in Europe by year-end with 211MW of data center supply.

"Providers are looking to meet strong hyperscaler demand and grow relatively young data center markets with greater returns in mind.”

However, despite the additional capacity, take-up is still expected to outstrip new supply delivered in Europe, said CBRE. There is 714MW of take-up and 551MW of new supply projected for 2024 across the 15 markets tracked by CBRE.

Andrew Jay, head of data center solutions at CBRE added: “By year-end, European supply will have more than doubled over the past five years.

"However, more data centers will be needed outside of metro markets to accommodate artificial intelligence (AI) workloads given the lack of available power and AI-ready facilities in densely populated cities of Europe.”