The Frankfurt, London, Amsterdam, Paris and Dublin markets (FLAP-D) remain the central hubs for capacity expansion driven by deployment from the major global cloud hyperscalers, finds a report by Knight Frank. However, all these cities have extremely low vacancy, and that coupled with grid constraints, means digital infrastructure here is struggling to keep up with the burgeoning demand.
The report titled Data Centers: The EMEA Report also finds that the majority of the power capacity increase comes from colocation companies and public cloud activities.
According to Oscar Matthews, Partner, Development and Investment, Knight Frank, “Activity during the first three quarters of 2025 have reinforced enduring features of the EMEA data center market: robust, technology led demand notably from hyperscale cloud and AI capacity and stimulates intensification of supply side constraints driven by power, planning and delivery risks.”
A closer look at FLAP-D
Frankfurt’s colocation vacancy remains very limited, which has resulted in some expansion projects being halted or relocating outside of the central cities, such as Global Switch’s campus expansion project halted. Colt DCS announced two new sites (63MW) in Wiesbaden, EdgeConneX expanding in Heusentamm and First Colo expanding 24 MW in Rosbach. Vacancy remained at 0.6 percent with 71.1 percent construction capacity already pre-let.
London remains Europe’s largest capacity supply hub at 5.1 GW to attract hyperscale and colocation investment with 47.4 MW added in new capacity. National Grid connection reform adopted the “first ready, first connect” model to support facilities and investment strategies. Colocation vacancy limitations remain at 5.9 percent unable to match hyperscale requirements adding more pressure to the construction pipeline deployments.
The Amsterdam data center market is heavily constrained by policy regulations and grid congestion experiencing the lowest new development projects of any European hub. Amsterdam continues to attract next generation computer investment in quantum computing, AI infrastructure capacity and cloud region expansion. While colocation vacancy remains at 7.5 percent to support hyperscale development.
Paris in early 2025 experienced a large expansion which resulted in 3.4 GW capacity increase positioning the city as a major hyperscale hub for new developers investing institutional capital. Leasing activity was driven by demand from public cloud providers and AI although colocation vacancy remained at 3.4 percent and 61.2 percent capacity under construction in pre-leasing.
Dublin power supply stayed at 1.9 GW, the Commission for Regulation of Utilities (CRU) recently proposed new rules which oblige new facilities to balance demand with on-site generation and storage. Colocation vacancy rate is only at 1.3 percent with 4 MW in available capacity which is not adequate to support hyperscale requirements, public cloud service providers account for 73 percent of built IT capacity.
Emergence of Madrid and Milan
As western Europe is pushed to maximum capacity, markets including Madrid and Milan are both becoming strategic locations for data center development in Southern Europe.
The Madrid data center market has experienced a demand surge from numerous new colocation data center projects representing 88.5 percent of total power supply which pressurises grid connections. New grid connections, power access and sustainability are central for this market growth and institutional capital investment in Madrid based assets such as Arjun Infrastructure acquiring a Data 4 stake valued at US$ 3.6 billion. Current colocation vacancy remains at 14.9 percent with 11.8 percent pre-let.
Milan saw an increase in hyperscale demand and institutional investment with supply over 2.2 GW, which is more than double in 2024. The city has been recognised as a strategic location for infrastructure investors, for example Microsoft confirmed a US$ 5 billion commitment to expand its cloud and AI footprint in Italy. The city has 8.9 percent colocation vacancy, leasing market take up of 23.9 MW and 84 percent activity from public cloud demand with colocations data center centers are the majority of the facility construction pipeline.
According to Oscar Matthews, “Where energy constraints and planning bottlenecks persist, development timelines will extend, and occupiers will look alternative regions or adopt hybrid development strategies that combine central cloud regions with edge solutions.”