The data centre gold rush

Every time you ask ChatGPT a question, stream a Netflix series, or sync your phone to the cloud, you’re tapping into one of the 21st century’s most critical – and increasingly scarce – resources: data centre capacity. And right now, Europe can’t build these digital fortresses fast enough.

Welcome to the first part of our deep dive into Europe’s data centre boom, where concrete, copper, and kilowatts are converging into what might be the most compelling real estate story of the decade. At Bravura Investments, we’re watching this space closely. Not just because the numbers are staggering, but because the physical infrastructure behind our digital lives is reaching a critical inflection point.

The Numbers Tell a Dramatic Story

Europe’s data centre landscape has exploded. As of early 2025, the region hosts approximately 12 gigawatts (GW) of data centre capacity spread across nearly 3,000 facilities. To put that in perspective, that’s enough power capacity to run a small country. But here’s where it gets interesting: there’s another 20 GW in the development pipeline – almost double the current capacity waiting to be built.

The market has been growing at a compound annual rate of around 13% since 2018, and that acceleration shows no signs of slowing. Investment has poured in at a staggering pace: the ten largest investors alone spent €86 billion since 2016, with tech giants like Amazon and Microsoft leading the charge as they scramble to expand their cloud empires.

The FLAPD Phenomenon

Five cities currently dominate Europe’s data centre map, collectively known by the acronym FLAPD: Frankfurt, London, Amsterdam, Paris, and Dublin. These five metropolitan areas account for roughly 40% of Europe’s total installed capacity, with London alone surpassing 1.5 GW – making it the undisputed heavyweight champion of European digital infrastructure.

Why these cities? A perfect storm of factors: robust telecommunications networks, political stability, proximity to major population centres, and – crucially – they got there first. The network effects are powerful: hyperscalers (the Amazons, Googles, and Microsofts of the world) want to be where other hyperscalers already are, creating self-reinforcing clusters of digital infrastructure.

But America Still Leads the Pack

For context, Europe’s 12 GW of capacity sounds impressive – until you compare it to the United States, which already hosts around 54 GW and continues to expand at a record pace. In 2024 alone, capital investment in U.S. data center construction reached $31.5 billion.

Yet, both regions share strikingly similar headwinds: tight power availability, regulatory uncertainty, and the disruptive influence of artificial intelligence – reshaping how data centers are designed, built, and operated.

The AI Revolution Changes Everything

Speaking of AI – this is the plot twist that’s rewriting the entire data centre playbook. Generative AI and high-density compute workloads don’t just need more capacity; they need different capacity. Traditional data centres were designed for relatively predictable, distributed workloads. AI training and inference require concentrated power delivery at densities that would have seemed absurd five years ago.

This shift is driving a massive wave of new construction, with purpose-built AI campuses emerging across Europe. From Brookfield’s AI-focused development in Stockholm to the massive Start Campus project in Sines, Portugal, developers are racing to build the specialized infrastructure that tomorrow’s AI workloads will demand.

Southern Europe’s Moment in the Sun

Here’s where things get particularly interesting for real estate investors. The FLAPD markets are hitting the ceiling – literally running out of power, land, and grid capacity to support new development. Rents in these core markets are forecast to increase by more than 10% due to acute supply-demand imbalances.

This scarcity is pushing development southward and eastward. Spain, Portugal, and Italy** are emerging as the new frontier, offering what the mature markets increasingly cannot: available land, grid capacity, competitive power costs, and – crucially – government incentives to attract digital infrastructure investment.

The Nordics and parts of Eastern Europe are also attracting significant interest, particularly for operators focused on sustainability (cold climates mean lower cooling costs) and renewable energy access.

The Property Play: It’s All About Power-Ready Land

For commercial real estate investors, the opportunity is clear but nuanced. The bottleneck isn’t just land – it’s permitted, grid-connected, power-ready land. A plot with planning permission and guaranteed power allocation is worth exponentially more than raw acreage, no matter how well-located.

This is creating interesting dynamics in secondary markets. Investors who can identify and secure strategic parcels in emerging hubs ahead of the curve stand to capture significant value. The land banking game has never been more critical, nor more complex.

Potential Clouds on the Horizon

But this isn’t a risk-free gold rush. The challenges are substantial:

Power and grid constraints are the industry’s major challenge. Both Europe and the US face severe limitations in power infrastructure, with grid connection wait times stretching years in some markets. Without electrons, even the best-located site is worthless.

Regulatory pressure is intensifying, particularly around environmental performance. European operators face increasingly stringent requirements on emissions, water usage, and land sustainability. ESG compliance costs are rising, and the regulatory landscape continues to evolve – sometimes unpredictably.

Geopolitical and supply chain risks loom large for critical infrastructure sectors. The data centre industry sits at the intersection of energy security, digital sovereignty, and international technology competition.

AI-driven volatility cuts both ways. While AI is driving unprecedented demand, it’s also creating uncertainty about future requirements. Today’s cutting-edge facility design might be obsolete in a couple of years as the technology evolves.

What Comes Next

Europe stands at a crossroads. The next five years will determine whether the region becomes a major player in digital infrastructure or falls further behind North America and Asia. Success will require agile strategies, creative solutions to power constraints, and deep partnerships with hyperscalers and governments.

For investors willing to navigate the complexity, the opportunity is substantial. The digital economy isn’t slowing down – it’s accelerating. And that acceleration needs to happen somewhere physical, on actual land, consuming real power. The question is: where will the next generation of Europe’s digital infrastructure be built?

In the coming articles in this series, we’ll explore the regional dynamics in depth, examine the power and sustainability challenges reshaping the sector, and investigate what successful data centre investment strategies look like in this new landscape.

The data centre gold rush is on. The smart money is figuring out where to stake their claims.

Stay tuned for Part 2, where we’ll explore the emerging Southern European opportunity in detail – and why sunny Spain and Portugal might just be the next Frankfurt.

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Sources:

The Data Centre Gold Rush: Why Europe’s Digital Infrastructure is the Investment Opportunity of the Decade