Data centres have increased in number over the last year. The significant rise can be attributed to the world becoming more remote, driven by the Covid-19 pandemic. During the pandemic, data centres became essential to businesses everywhere. In January 2021, data from ABB Power Conversion suggested that the global market for data centres will grow 14% year-on-year in 2021. 96% of professionals from data centres said that they experienced an increase in demand in 2020.
In Europe, revenue from data centres was predicted to rise by 46% in 2021. In particular, a report from DCP highlighted new facility buildouts, with 70 projects already taking place at the beginning of the year. In the Asia-Pacific region, Australia-based group Lendlease joined with an institution to invest $1 billion in data centres across the region. The Singaporean sovereign wealth fund GIC and the data centre landlord Equinix joined up to acquire and develop six hyperscale data centres in Europe for over $1 billion.
Hyperscale data centres are another rapidly growing area around the world, with nearly 600 of them around the world at the end of 2020 – more than twice as many as in 2015. More than half of these facilities are owned by big names: Amazon, Google, and Microsoft. Half of all hyperscale facilities in 2020 were opened by Amazon and Google. More than 4.3 million square feet of data centre space is being developed around the world.
Last year, a panel of investment bankers advising data centre operators and investors in the sector stated that a large boom was on the way. At the HCTS 2020 conference by 451 Research, the panel highlighted how digital transformation would be accelerated by the pandemic and the aftermath. Although there was uncertainty at the beginning of the pandemic, it soon gave way to a growth in demand. In addition to the growth in demand, investors have been attracted by returns on offer, which are usually higher compared to traditional real estate.
The four largest markets in the European data centre sector include the UK, Germany, Netherlands, and France. These countries account for 70% of the data centre space in 15 European countries. However, more growth is predicted outside of these countries, in Portugal, Ireland, Italy, Spain, and Switzerland.
The global growth rate for the data centre sector is expected to be a compound annual growth rate of over 2% between 2019 and 2025, according to a report from Research and Markets. In addition to the pandemic, some key drivers of growth in the sector include the internet of things, cloud storage, and tax incentives. Growth in the sector was already underway before the pandemic, but the global events propelled the data centre sector even further.
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