In the 19th century, London helped power the world during the Industrial Revolution through infrastructure determined economic strength and geopolitical influence. Today, London occupies a similar position in the digital economy. Data centers, fibre routes, substations, and renewable power contracts now underpin financial markets, AI development, public services, and global cloud platforms. London is Europe’s largest data center hub with the highest accelerating growth, but so are the constraints particularly around power, planning, and sustainability.
London market size and expanse
London’s data center market is expanding at scale.
According to Mordor Intelligence, the London data center market’s installed capacity was 2.45 GW in 2025, and estimated at 2.77 GW in 2026. It is projected to grow to 5.16 GW by 2031, at a CAGR of 13.21 percent. Further, driven by AI demand, large facilities (10-20 MW) accounted for 44.95 percent of London data center market share in 2025, while mega facilities (>40 MW) are poised for the fastest 27.60 percent CAGR through 2031.
Colocation take-up is forecast to reach 183 MW in 2025, a 58 percent increase from 2024. Despite new supply, vacancy rates are expected to fall below 8 percent, indicating structural demand pressure.
Connectivity remains London’s primary competitive advantage. The UK has approximately 64 subsea telecommunications cables landing on its shores, around 50 active, including 45 international systems and additional links through the Channel Tunnel. These privately operated systems carry the vast majority of UK international data traffic. The country’s shallow-water access and proximity to continental Europe make it a strategic transatlantic gateway. A significant portion of traffic between North America and mainland Europe transits via the UK.
London hosts 53 operators across 135 facilities and accounts for roughly 80 percent of total UK data center capacity. The ecosystem includes hyperscalers, AI developers, global financial institutions, cloud platforms, and enterprise colocation providers. Docklands remains a dense carrier and exchange environment, while West London supports hyperscale campuses.
Major AI-linked investments reinforce the scale of demand. In 2025, OpenAI partnered with Nscale and NVIDIA to launch Stargate UK. Microsoft committed £22 billion (US$ 30 billion) to UK AI infrastructure between 2025–2028, including development of the country’s largest supercomputer in Essex. Google opened its Waltham Cross data centre as part of a £5 billion (US$ 6.8 billion) UK expansion programme. CoreWeave is investing £1.5 billion (US$ 2 billion) in AI-focused data center capacity. Salesforce plans to invest an additional US$2 billion through 2030 to expand UK AI R&D capabilities. Scale AI and Palantir Technologies are also expanding UK operations with new funding and job creation.
Key development areas in and around London
Development is concentrated in established clusters but is increasingly expanding outward due to grid constraints.
Slough: This remains Europe’s largest data center cluster and London’s primary digital hub. It hosts multiple hyperscale and colocation campuses with ongoing expansion. However, grid capacity in the area is constrained, influencing project timelines. Among recent projects announced here is Yondr Group’s third building of its campus, adding 40 MW and bringing total capacity above 100 MW.
Hayes / West London: This is a major hyperscale expansion zone. For example, recently, Colt Data Centre Services secured approval for a £2.5 billion (US$ 3.4 billion) expansion of its Hayes Digital Park. The development includes three new hyperscale facilities and an Innovation Hub, adding 97 MW and bringing total campus capacity to 160 MW. Construction is scheduled to begin in mid-2026, with first operations expected in early 2029.
London Docklands (Tower Hamlets / Newham): This remains the historic interconnection core, closely linked to financial services and carrier networks. The area benefits from proximity to trunk fibre routes and metro exchange points. New proposals include both expansion of existing sites and greenfield developments designed to integrate renewable energy and advanced cooling systems.
Dagenham / Barking: This area includes facilities such as NTT’s London East Business and Technical Park site. The area offers industrial land and logistics connectivity suitable for high-density compute.
Hemel Hempstead, Reading, Hertfordshire, and East London’s Royal Docks: These are the areas where planning approvals are supporting river-water cooling, renewable integration, and community infrastructure. Sites beyond the M25 offer comparatively faster grid access and lower land acquisition costs.
In Hertfordshire, Equinix acquired an 85-acre site in a £3.9 billion (US$ 5 billion) transaction to deliver over 250 MW of AI-ready compute capacity. The project is expected to generate 2,500 construction jobs and more than 200 permanent roles. During construction, it is estimated to contribute £3 billion (US$3.81 billion) in gross value added (GVA), with ongoing annual economic contribution projected at £260 million (US$ 330 million). The design retains 54 percent open space, implements dry cooling systems, and aims to achieve biodiversity net gains.
Vantage Data Centers opened its LHR2 campus in Park Royal, delivering 20 MW of IT capacity with BREEAM Excellent certification and district heating connectivity. Across the UK, Vantage’s portfolio totals 223 MW across 2.6 million square feet. Additional announced projects include 80 MW in Newham and 320 MW in Hertfordshire.
Regulating London’s data centers: Security, resilience, and policy
The UK government has formally designated data centers as critical national infrastructure. This reflects their role in supporting economic activity, public services, and AI deployment.
Following December 2024 reforms to the National Planning Policy Framework, local authorities in England must consider data center needs when evaluating planning applications. Special AI Growth Zones (AIGZs) provide fast-track planning and infrastructure coordination.
Under the Cyber Security and Resilience (Network and Information Systems) framework bill, data centers exceeding 1 MW rated IT load (for colocation) or 10 MW (for enterprise) are classified as Operators of Essential Services. These operators must implement proportionate technical and organisational controls to manage cyber risk, operational continuity, and incident response. Significant service-affecting incidents must be reported to Ofcom within defined thresholds, including certain near-miss events. Operators must maintain structured regulatory engagement and update material operational changes. Non-compliance can result in formal enforcement actions and financial penalties.
Energy and resource management are central policy priorities. Data centers currently account for approximately 2.5 percent of UK electricity demand. Forecasts indicate this could increase substantially by 2030, particularly as AI workloads scale.
At the metropolitan level, renewable governance is coordinated through the Greater London Authority. The London Plan 2021 mandates low-carbon construction, promotes district heating deployment, and sets operational carbon limits. The London Environment Strategy advances citywide decarbonisation goals. The Be Seen energy performance reporting policy requires large buildings to disclose operational energy consumption, reinforcing transparency and efficiency.
Inside London’s power struggle
Demand growth is constrained by grid access which has incentivised companies to significantly consider power purchase agreements.
Renewable PPAs are now standard procurement instruments. Telehouse Europe secured a 10-year wind energy supply agreement linked to the London Array offshore wind farm. Global Switch signed an eight-year renewable contract involving wind assets developed by RWE. VIRTUS data center entered a 31 MW wind PPA associated with the Lynn and Inner Dowsing windfarms, representing 16 percent of their total generation which commenced in October 2025.
Slough and Docklands face grid limitations that affect new project timelines. Developers are increasingly evaluating sites where grid connection queues are shorter. Renewable PPAs, on-site efficiency measures, and emerging storage integration are being deployed to hedge price volatility and secure supply.
Hybrid procurement models combining PPAs, renewable energy certificates, and flexible load management are becoming more common as operators align decarbonisation targets with expansion plans.
Energy demand from data centers has also intersected with broader infrastructure debates, including housing delivery delays and the pace of grid reinforcement projects. Coordinated planning between operators, utilities, regulators, and local authorities is required to manage competing demands.
What lies ahead
Connectivity and distributed compute are expanding across Europe. For example, Zayo Europe announced a 400G wave route linking London and Frankfurt via Brussels. The 998 km route forms part of the Q&E North subsea system and enhances resilience and low-latency connectivity between major European hubs. This supports the FLAP-D markets Frankfurt, London, Amsterdam, Paris and Dublin underpins Europe’s anticipated 35 GW data center IT load by 2030.
Looking ahead, 6G development is emerging as a strategic priority. The UK government has committed £100 million (US$ 127 million) to early 6G research, with emphasis on influencing international standards and maintaining technological competitiveness.
London remains FLAP-D market’s largest data center hub due to interconnection density, capital concentration, regulatory clarity, and renewable procurement strategy. Growth continues at pace, but long-term expansion depends on grid reinforcement, coordinated planning, and scalable low-carbon energy supply.