AI drives surging data centre demand across EMEA

A new report by Savills indicates that AI is rapidly becoming a significant factor in the increasing demand for data centres across Europe, the Middle East, and Africa (EMEA), second only to public cloud services.

AI - Savills

With AI spending predicted to reach $144.6 bn (€125.1 bn) by 2028 (a 30.3% annual growth rate), the computational power needed for AI is heavily straining EMEA's digital infrastructure. Over the past year, live data centre capacity in EMEA has grown by 12%. Key markets like France (15%), Germany (10%), and the UK and Ireland (9%) saw strong expansion, while the Netherlands had slower growth (6%) due to a government moratorium. Emerging markets such as Portugal (60%), Saudi Arabia (49%), Spain (25%), the UAE (20%), and Sweden (17%) experienced substantial increases.
However, despite this demand, only 850MW of new power capacity has been added in EMEA since the beginning of 2025, an 11% drop from the previous year, highlighting ongoing limitations and delays in delivery. New leases also fell to 845MW this year, about half of what was leased in 2024. Savills clarifies that this slowdown is not due to a lack of interest from users, but rather a shortage of available new facilities.
The strong underlying demand is evident in the total contracted power capacity, which has increased by 12% year-on-year to nearly 14,500MW. Roughly a quarter of new leases are now pre-let, up from under 20% three years ago. As a result, occupancy rates across EMEA data centres have climbed to 91% in Q3 2025, demonstrating that demand continues to outstrip supply.
Cameron Bell, Director, EMEA Data Centre Advisory at Savills, commented: “While demand is gradually expanding beyond the traditional European hubs, the bulk of the requirements continue to cluster in the FLAP-D (Frankfurt, London, Amsterdam, Paris and Dublin) markets, supported by dense populations and the presence of large corporate occupiers. The persistent imbalance between surging demand and restricted supply continues to underpin rental values. Following three years of sharp increases, average rents have stabilised across the region. Nonetheless, with accelerating AI-related requirements, rising energy costs and sustained construction inflation, further upward pressure on pricing is widely anticipated for the rest of 2025 and beyond.”
According to Savills, the EMEA data centre investment market remains robust and appealing to investors, driven by strong long-term fundamentals. Even with ongoing power supply issues, the critical role of data centres in the digital economy guarantees a need for significant capital investment for the foreseeable future.
Since 2021, private equity, real estate funds, and infrastructure investors have backed 80-90% of data centre deals, a significant increase from 50% in 2020. Fundraising for data centre investments has also surged, with volumes by Q2 2024 already nearly 40% higher than all of 2023, highlighting the sector's growing attractiveness.

However, challenges persist, particularly concerning escalating construction costs. Data centre build costs across EMEA now range from $7.3 mln (€6.3mln) to $13.3 mln (€11.5 mln) per megawatt, covering all essential components. Several cities have seen sharp annual cost increases, including Vienna (+27.5%), Warsaw (+25.4%), Stockholm (+18%), and Copenhagen (+17%). A survey by Turner & Townsend indicates that most respondents experienced a 5-15% increase in costs over the past year, with some facing even higher jumps.
Marc Edmondson, director and data centre expert in the Building & Project Consultancy team at Savills, said: “With construction timelines lengthening, capital expenditure is also rising. Greenfield construction costs have risen sharply, reflecting labour shortages, land scarcity, and persistent supply chain issues. Globally, this has seen average costs increase by over 6% year-on-year. In EMEA this rise was even steeper at 9.7%. As a result, we are seeing developers responding with forward purchasing and closer ties with suppliers, while some are pivoting to emerging markets offering more accessible land and power.”
Savills predicts that AI will continue to fuel exceptionally high demand for data centre capacity, especially as businesses increasingly use complex hybrid strategies combining public cloud, private infrastructure, and colocation services. This will lead to strong growth in established data centre hubs, particularly those with reliable power grids and affordable energy. At the same time, a trend of decentralization is emerging, with secondary and tertiary markets—especially in Southern and Eastern Europe and the Middle East—gaining prominence due to access to cheaper land and renewable energy.