Global Real Estate Booms as Data Center Demand Surges, Cushman & Wakefield Reports

By: Velorine

The global data center market is experiencing a transformative surge, driven by the explosive growth of cloud computing and artificial intelligence (AI). According to Cushman & Wakefield’s latest Global Data Center Market Comparison report, the demand for data infrastructure is escalating rapidly, prompting a significant shift in real estate development strategies worldwide.

Global Demand Soars Amidst AI and Cloud Expansion

The relentless expansion of AI and machine learning applications is reshaping the data center landscape. John McWilliams, Head of Data Center Insights at Cushman & Wakefield, notes that total capacity across all global regions is expected to at least double based on current development pipelines. This growth trajectory underscores the critical role of data centers in supporting the digital economy.

Key Trends Shaping the Data Center Real Estate Market

1. Suburban and Rural Expansion

As urban centers become saturated, developers are turning to suburban and rural areas for new data center sites. Locations like Virginia, Phoenix, and Johor are emerging as top choices due to their availability of large plots and access to power infrastructure.

2. Power Availability and Infrastructure

Access to reliable and scalable power sources is paramount. Markets such as Kansas City, Iowa, and Salt Lake City are gaining traction as they offer untapped power grids and renewable energy options, making them attractive for large-scale data center developments.

3. Investment and Market Dynamics

The data center sector continues to attract significant institutional investment. Joint ventures, mergers, and acquisitions are on the rise, with firms targeting both established and emerging markets. This influx of capital is accelerating the development of data center facilities worldwide.

Global Market Rankings

Cushman & Wakefield’s report ranks the top data center markets globally, highlighting both established and emerging hubs:

Established Markets:

• Americas: Virginia, Phoenix, Dallas, Atlanta, Oregon
  
• APAC: Beijing, Shanghai, Sydney, Tokyo, Guangzhou
  
• EMEA: London, Frankfurt, Amsterdam, Paris, Madrid
  

Emerging Markets:

• Americas: Kansas City, Iowa, Austin, Salt Lake City, Indianapolis
  
• APAC: Johor, Osaka, Hyderabad, Bengaluru, Auckland
  
• EMEA: Abu Dhabi, Berlin, Helsinki, Zurich, Warsaw
  

These rankings reflect a strategic shift towards regions offering favorable conditions for data center development, including land availability, power infrastructure, and regulatory environments.

Looking Ahead

The landscape of data center real estate is evolving rapidly. As demand continues to rise, developers and investors must adapt to the changing dynamics, focusing on scalability, sustainability, and strategic location selection. The next frontier in data infrastructure will be defined by the ability to meet the growing needs of AI and cloud computing while navigating the complexities of power availability and land acquisition.