DataCenter Markets in Southeastern Europe are expected to grow by 30-55% according to the reports

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The Data Center market in Southeastern Europe has massive growth potential over the next two-three years. All indicators point in this direction, with countries in the region becoming increasingly attractive to investors due to the presence of highly efficient communication networks along the Western Europe-Asia axis and affordable costs for land, energy, construction, and labor.

?According to the EMEA Data Centre 2024 report published by real estate consultancy JLL, secondary markets in Europe, including Spain, Poland, and Romania, are projected to grow by an average of around 49%, while the core FLAPD area (Frankfurt, London, Amsterdam, Paris, Dublin) is forecasted to not exceed 16%.

?Furthermore, the same report indicates that markets in Southern Europe are expected to grow between 30-55% in the year ahead.

?The widespread adoption of Artificial Intelligence and cognitive power processes is generating unprecedented demand for data center capacity, occurring not only in mature markets in the West but also in secondary or emerging markets, including Romania. The report also highlights those investments in the data center industry in 2023 doubled compared to the previous year, totaling €2.34 billion Europe-wide.

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”The entire Southern Europe DataCenter market in booming. Bucharest could potentially triple or even increase its data center capacity by up to seven or eight times in the next three years, following announcements of new large projects in or around the city by several investors in recent months”, stated Mihai Manole, CEO of Tema Energy and organizer of the DataCenter Forum, the largest event dedicated to the data center industry in the region.

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Bucharest ranks ninth in the EMEA (Europe, Middle East, and Africa) emerging markets, with data centers totaling 15 MW of power, according to a 2023 report released by real estate consultancy Knight Frank. However, projects already in development could increase this capacity to at least 50-55 MW in the relatively short term. Last year, several major players announced their intentions and commenced projects to build large data centers in Bucharest, primarily due to its easy access to communication lines, electricity network, and qualified staff.

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Southern Europe DataCenter markets are booming

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Not only is Bucharest rising in the interest of investors, but the entire Southeastern region of Europe is also boosted by its efficient and reliable connectivity.

?Within this evolving landscape, Athens stands out as a promising market, drawing the attention of major players. The Greek capital already possesses the greatest IT capacity in the region, totaling 101 MW. However, the growth potential is enormous, as Microsoft plans to construct three data centers in the greater Athens area to provide cloud computing services in Greece, with a total budget of approximately 976 million euros.?

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Additionally, the French company DATA4, Digital Realty, and Sparkle, the international 'arm' of Telecom Italia, announced plans for new data centers. Greek company Lancom, having invested over 20 million euros to date, has initiated a new investment in Crete for the creation of another data center, potentially serving as a gateway to the Balkans.

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A similar situation is observed in Sofia, where in 2023 Equinix invested more than $12 million in the expansion of an existing data center, doubling the site's capacity to 700 racks. Moreover, the entire data center market in Bulgaria is projected to grow by 6.96% from 2024 to 2028, reaching a market volume of US$201.70 million by 2028.

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Similarly, Zagreb will experience consistent growth in the next couple of years. Digital Realty has already announced the expansion of its existing data center in Zagreb, ZAG1, with an additional 1,600 m2 of ICT and technical space. Furthermore, Digital Realty plans to invest in building a second data center in Zagreb, also at a hyperscale level, for the future.

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Investment opportunities panel discussion at DataCenter Forum 2024

Most international analysts believe that the dramatic reduction in available data center space and power in the highly developed data center countries (UK, France, Netherlands, Germany, Ireland, etc.) will lead more and more investors to turn to secondary markets: Eastern Europe and Scandinavia.

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Thus, over the next two years, the main investments will be directed to places where the cost of land, energy and human resources is lower, but where there are also efficient communication nodes, sufficient (and green) electricity, and the technical capabilities to build and operate large data centers.

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This year's DataCenter Forum, scheduled for May 9th, will feature the first-ever debate on investment opportunities in Romania, with representatives from ClusterPower, DC Byte and Portland Trust. DataCenter Forum, the only event dedicated to the data center market in Romania and the most notorious one in the region, brings together the most important players in the industry, from investors and data center operators, to specialists, designers, consultants or end-customers.

The event is organized by Tema Energy, leader of the Data Center market in Romania, with recognized expertise in turnkey engineering and execution of electrical, mechanical, security, and software systems. The partners of the 2024 edition are the following data center technologies producers: Schneider Electric, Rittal, Eneria CAT, R&M, Fujitsu, Panduit, nVent, Cummins, Vertiv, Aksa, Vertiv, HiRef, Pyralis and Uniline TCS.