Originally posted on Data Center POST
In the evolving landscape of the data center industry, market researchers help to keep the industry’s influencers up-to-date with the latest trends and developments. datacenterHawk, the global data center real estate analysis platform, released its 3Q 2023 Data Center Market Recap, to provide its insights and research into the industry’s performance and challenges worldwide. This report sheds light on the continued growth of data center markets in major regions, Asia-Pacific, Europe, Latin America, and North America, and the challenges that are influencing the industry.
A World of Data
The global data center industry is in the midst of a large growth phase, marked by increasing demand and the emergence of AI requirements. This growth is driving the development of new submarkets and opportunities in both established and emerging regions. David Liggitt, Founder and CEO at datacenterHawk, emphasizes the importance of understanding these markets’ challenges and their potential for future opportunities in this period of tremendous industry growth.
Asia-Pacific: An Emerging Hub
The Asia-Pacific region remains a target of new activity, with countries like Singapore and Hong Kong continuing to attract hyperscale companies. However, supply backlogs stemming from manufacturing challenges outside of the region are hindering its capacity to deliver new infrastructure. Despite this limitation, high absorption rates are pushing hyperscale companies to develop large campuses independently. The future looks promising for the region, as datacenterHawk anticipates that forthcoming opportunities will help alleviate some of the pipeline constraints.
Europe: Battling Power Shortages
Europe is grappling with an ongoing power supply shortage, leading many companies to secure additional capacity in anticipation of future needs. However, this approach could put further strain on capacity throughout the region. Demand for space in Europe’s major FLAPD (Frankfurt, London, Amsterdam, Paris, and Dublin) is on the rise despite limited supply. Providers are planning larger campuses, often involving the acquisition and redevelopment of existing corporate campuses due to the scarcity of suitable greenfield sites. Power constraints in these major markets are pushing AI implementation to emerging markets and FLAPD sub-markets like Manchester and Leeds, but with power issues and the time required for site redevelopment, European markets are experiencing delayed development timelines.
Latin America: Facing Economic Challenges
Growth in Latin American markets has slowed in 3Q due to economic challenges, supply chain struggles, and power constraints. Although primary markets like Querétaro, Mexico, experienced a surge in growth in previous quarters, they are now facing power constraints and construction delays. Despite these challenges, LATAM countries continue to commission large amounts of power in the hope of attracting further developments. AI is driving growth in other global markets, but LATAM is not likely to fully support AI implementation until 2025 and may have to do so in secondary markets. The region’s overall industry development will benefit from hyperscale growth, but challenges with AI implementation could keep LATAM’s development behind that of other major regions.
North America: Campus Development Thrives
Campus development remains a significant driver in the North American market, with developers purchasing large plots of land for long-term project planning. Absorption rates remain high across the region, reflecting the growing demand for AI and cloud services. However, the increasing demand for space and decreasing vacancy rates have led to higher costs. datacenterHawk predicts that North America will see increased speculative capital spending and more significant growth in its submarkets to overcome these challenges.
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