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. Investors are drawn to the combination of steady cash flows, high occupancy, and long-term contractual commitments with hyperscalers and enterprise clients, with returns typically around 10%. This has firmly established data centres as secure, long-term investments, fuelling competition among financial sponsors and operators alike.

Private equity has emerged as the dominant force in the sector’s evolution. Since 2021, between 80% and 90% of the value of closed deals has been backed by private equity, real estate funds, or infrastructure investors, compared with just over 50% in 2020. These investors not only provide capital but also shape strategy, and have driven some of the largest transactions in recent years, often taking major players out of public markets. Fundraising activity has accelerated accordingly, with volumes for data centre vehicles at the end of the second quarter of 2024 already almost 40% higher than the total raised in the whole of 2023, reflecting the sector’s growing appeal.

The data centre M&A market has entered 2025 with striking momentum, particularly across Europe, where investor appetite remains strong and confidence in the sector’s fundamentals continues to deepen. A steady stream of high-profile deals, both completed and in progress, highlights the continued attraction of data centres as a core infrastructure investment.

The first months of the year have already delivered several notable transactions that demonstrate both the scale and diversity of capital entering the market. In August, Apollo acquired a majority stake in Stream Data Centers, reflecting investors’ sustained interest in hyperscale infrastructure. In July, Vertiv expanded its European footprint through the €200 million acquisition of Great Lakes Data Racks & Cabinets, strengthening its portfolio of AI-ready solutions. Earlier in April, Iron Mountain finalised the acquisition of Web Werks in India, further underlining the global nature of capital flows and the ongoing wave of consolidation. Meanwhile, Sanmina’s €3 billion agreement to purchase ZT Systems’ manufacturing business from AMD, expected to be completed by year-end, illustrates the growing convergence between technology firms and data centre operators.

Beyond these completed transactions, a number of major sales are currently under way. Oaktree Capital Management has initiated the sale of part of its European and Middle Eastern platform, Pure DC, reportedly valued at up to €5 billion. Swiss investor Partners Group is seeking up to €4 billion for its Nordic operator atNorth, while EQT has launched the sale of GlobalConnect, its Nordic broadband and data centre business, potentially valued at around €8 billion. In the US, BlackRock’s Global Infrastructure Partners is nearing the acquisition of Texas-based Aligned Data Centers from Macquarie in a deal estimated at nearly $40 billion. Elsewhere, DWS, Deutsche Bank’s asset management arm, aims to raise about €2 billion from the sale of its NorthC data centre business, while Orange is preparing to divest stakes in several French facilities, though details remain undisclosed.

According to Synergy Research Group, 2025 has already recorded 162 data centre–related M&A transactions worldwide, representing a combined value of more than $46 billion, with a further 45 deals worth an estimated $35 billion still pending. Should these transactions close, the year could once again challenge last year’s record, when 287 deals worth over $77 billion were completed globally.

Financing strategies are evolving in line with the sector’s intensifying capital requirements. While debt and equity markets remain the backbone of project funding, new avenues are opening. Asset-backed securities are gaining traction, with Vantage launching the sector’s first public ABS issuance in 2024 and further deals expected across Europe in the coming year. At the same time, yieldcos are emerging as a promising structure, enabling operators to hive off stable, cash-generating assets into vehicles designed to attract investors seeking predictable, lower-risk returns. These vehicles may also become a channel for hyperscalers to divest assets, freeing up capital for reinvestment in growth. Alongside, joint ventures, IPOs, and spin-offs are providing fresh means to share exposure and attract liquidity.

Another significant development has been the surge in investment across the broader ecosystem. As power constraints tighten and supply chains become more critical, capital is increasingly directed towards vertical integration, including innovative energy solutions, dark fibre networks, and network virtualisation. Landowners in strategic power-enabled locations are also benefitting, as the scarcity of suitable sites further drives up valuations.

Over the past three years, higher borrowing costs have prompted a slight outward movement in prime yields, increasing by approximately 40 to 50 basis points. This adjustment is relatively restrained, especially when compared to the more pronounced yield decompression observed in average prime office CBD yields (139 basis points) and prime logistics yields (104 basis points). Currently, prime data centre yields generally fall within the 4.0% to 5.0% range in core western countries, and have remained stable since the end of last year. Looking ahead, we expect yields to compress as competition among investors intensifies.

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