Study More And More Data Centers Are Driving the Demand for Logistics Space

From Bernd Maienschein | Translated by AI 2 min Reading Time

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A new study by the British commercial and real estate consultants Savills, headquartered in Frankfurt am Main, Germany, reveals that the growing market for data centers in Europe will trigger additional demand for logistics space amounting to 8.5 million square feet over the next three years.

According to Savills' calculations, Europe's growing market for data centers will increase demand for logistics space by a whopping 8.5 million square feet.(Picture: © DKPhoto - stock.adobe.com)
According to Savills' calculations, Europe's growing market for data centers will increase demand for logistics space by a whopping 8.5 million square feet.
(Picture: © DKPhoto - stock.adobe.com)

Very few people will think of logistics when it comes to the constantly growing market for data centers. Yet it is only natural that more data centers automatically mean more logistics space is required. According to Savills, measured in megawatts (MW), existing data centers in Europe currently have a capacity of 10,990 MW and 2,449 MW are currently under construction. If one compares the total take-up volume with the growth in energy demand from data centers under construction, for example in Dublin, Ireland (71 MW) or Houston, USA (250 MW), Savills estimates that the corresponding logistics space requirement is 7,500 to 10,800 square feet per MW of data center capacity. In the case of Houston, the analysis is based exclusively on the largest deals, which could even increase this lower limit, as it goes on to say.

Even though our analysis is still at an early stage, it is interesting to note that in markets with particularly strong growth in data centers, suppliers to the industry are increasingly renting traditional logistics warehouse space.

Kevin Mofid, Head of EMEA Logistics Research at Savills

Assuming an average of 8,800 square feet of logistics space per megawatt and applying this to the leading European data center markets of Frankfurt, London, Amsterdam, Paris and Dublin (FLAPD), where 950 MW are currently under construction, this would result in an additional demand of 8.5 million square feet of logistics space.

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Kevin Mofid backs up his company's view: "Although this trend is still at an early stage in Europe, we are already seeing developments in the UK, where AVK SEG, a provider of power supply solutions for data centers and AI infrastructure, has leased 140,000 square feet of logistics space in the North West of England."

In general, Savills is seeing 3PL occupiers and specialist service providers across Europe increasingly renting space to support the data center industry. Although occupiers are currently still benefiting from higher overall vacancy rates in Europe, "development pipelines" are declining and over time it could become difficult to secure this business-critical storage space.

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