The International Data Corporation (IDC) projects that AI spending will rise to $144.6 billion by 2028, reflecting a compound annual growth rate of 30.3% between 2024 and 2028. Savills notes that the scale of computational power required to train and deploy language models and other AI applications has placed unprecedented pressure on digital infrastructure across the EMEA region.

Cameron Bell, director, EMEA data centre advisory at Savills, comments: “Geographically, we have seen demand remain highly concentrated. Despite discussion around location agnostic strategies when it comes to AI, very few such projects have translated into transactions. Instead, operators are doubling down on existing availability zones, reinforcing consolidation in areas with established hyperscaler footprints, reliable energy supply and space for scalable growth. 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.”

Savills has seen live capacity expand by 12% over the past 12 months. Established hubs grew strongly, with capacity in France up 15%, Germany 10% and the UK and Ireland up by 9%. The Netherlands only saw 6% growth, which can be attributed to the ongoing government moratorium on new developments. What’s more, there has also been significant increases in non-traditional locations such as Portugal (60%), Saudi Arabia (49%), Spain (25%), UAE (20%) and Sweden (17%).

Yet, Savills has only seen 850MW of power capacity delivered across EMEA since the start of 2025, an 11% decline compared to the same period last year, underscoring persistent constraints and extended delivery timelines. At the same time, new take-up this year reached 845MW, around half the power capacity leased in 2024. Though, the firm notes that this slowdown does not signal weaker occupier appetite, but rather indicates the limited availability of new facilities coming to the market.

The underlying strength of demand is reflected in the total contracted power capacity, which has risen to nearly 14,500MW, up 12% year-on-year, with approximately one-fourth of take-up now pre-let compared with less than 20% three years ago. Consequently, this has seen occupancy rates across the region climb to 91% in Q3 2025, up from 87% in Q3 2022 illustrating that demand continues to outpace supply.

Cameron Bell continues: “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.”

As a result, Savills notes that the EMEA data centre investment market continues to show remarkable resilience and strong momentum, underpinned by long-term fundamentals that remain highly attractive to investors. Despite ongoing power challenges, the sector’s role as critical infrastructure in the digital economy ensures that substantial capital expenditure will be required for years to come.

Since 2021, between 80-90% of the value of closed deals has been backed by private equity, real estate funds or infrastructure investors, compared with just 50% in 2020. Fundraising activity has also accelerated with volumes for data centre vehicles at the end of Q2 2024 already almost 40% higher than the total raised in the whole of 2023, which reflects the sector’s growing appeal.

Yet challenges remain. Across EMEA, data centre build costs now range between $7.3 million and $13.3 million per megawatt of commissioned IT load, covering land, shell, electrical and mechanical systems, cooling, fire safety and fit-out. Markets with the sharpest annual cost increases include Vienna (+27.5%), Warsaw (+25.4%), Stockholm (+18%), and Copenhagen (+17%). According to a survey undertaken by construction firm Turner & Townsend, respondents reported a 5–15% increase in the past year, with 22% experiencing even higher increases.

Marc Edmondson, director and data centre expert in the building & project consultancy team at Savills, says: “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, whilst some are pivoting to emerging markets offering more accessible land and power.”

Overall, Savills believes that demand for capacity will remain exceptionally strong as a result of AI, especially as enterprises adopt more sophisticated hybrid strategies that blend public cloud, private infrastructure and colocation models. This will see robust take-up across established hubs, particularly those with secure grid access and competitive energy costs. Simultaneously, the emergence of secondary and tertiary markets, particularly in southern and eastern Europe and across the Middle East signals a gradual decentralisation of activity, supported by access to affordable land and renewable energy sources.