Data center investment reached unprecedented levels in 2024, with private investment hitting $108.1 billion globally — more than triple 2023’s result. “At the start of 2025, 2,870 megawatts of new data centre capacity is under construction in EMEA, with nearly 64% of this capacity pre-let, largely to cloud providers and, increasingly, AI firms,” says Ondřej Míček, Head of Industrial at Savills. “The exponential growth in data volumes continues to drive demand for facilities with sufficient capacity for data storage and processing. However, these facilities have been in short supply for a long time.”
The fact that data center capacities in the Czech Republic are insufficient is also confirmed by České Radiokomunikace, which is expanding its Tower data center in Prague’s Žižkov district due to rising demand. “The Czech market is experiencing particularly strong demand as international operators look beyond saturated Western European hubs,” says Lenka Šindelářová, Head of Research at Savills Prague. “Energy availability has become the primary consideration for new developments in our region.”
Around Europe, data centers remain highly attractive to investors despite rising interest rates, with robust rental growth and low EMEA vacancy rates of just 5%. Currently, 2,870 megawatts of new data center capacity is under construction across EMEA, with nearly 64% pre-let to cloud providers and AI firms.
The sector’s growth faces significant challenges, particularly in energy consumption. Data centers already account for 1-1.3% of global electricity demand, with AI-driven operations requiring substantially more power than traditional computing. In Ireland, data centers consumed 18% of the country’s electricity in 2022.
Rick Drescher, Corporate Managing Director and Lead of Savills Critical Facilities in the US, notes: “The rulebook of data center site selection has been ripped up; it now all comes down to where sufficient power can be accessed.”
Power constraints are now reshaping the market landscape. Traditional hubs like London, Frankfurt, Amsterdam, and Dublin face significant grid limitations, pushing investors toward emerging markets with fewer restrictions. Southeast Asia has become a primary beneficiary, with Malaysia’s Johor Bahru emerging as a major hub for Singapore’s overflow demand.
According to Savills, the European Union is taking steps to address sustainability concerns with its Energy Efficiency Directive, which took effect in May 2024. The regulation requires mandatory reporting of energy usage for data centers exceeding 500kW, covering metrics including floor area, power consumption, and renewable energy use.
Major tech companies are also driving sustainability innovations. Microsoft recently secured a 20-year deal for all energy from one nuclear reactor at Three Mile Island, while Google is planning to commission small nuclear reactors to support its data infrastructure.
As the sector continues to expand, investors must navigate the balance between rapid growth and sustainability. The intersection of real estate, infrastructure, and technology has transformed data centers into a non-cyclical alternative asset class, exemplified by Blackstone and Canada Pension Plan’s recent record-setting $16 billion acquisition of Australian operator AirTrunk.
