Data Center Deals Heating Up in EMEA
Recent years have seen a significant increase in demand for data centers in the EMEA region. Thanks to the rise of cloud computing, social media, and generative AI, these facilities play a crucial role in storing, processing, and distributing data for organizations around the world.
With the economic potential of AI and analytics estimated to be around US$10 trillion globally, the need for data centers is only growing. By 2026, these centers are projected to consume as much electricity as Japan annually, showcasing their importance in supporting technological advancements.
While the US leads in data center development, the EMEA market is also on the rise. Europe attracted around £1.8 billion in data center investment in the first half of 2024—an impressive 168 percent increase from the previous year. Despite this, an estimated US$250 to US$300 billion in investment is still needed by 2030 to meet the region’s infrastructure demands.
In the Middle East and Africa, the demand for data centers is also increasing, driven by a growing population’s need for digital services. With billions of dollars in active and future projects in the United Arab Emirates, the region is primed for rapid growth.
The technology sector in EMEA has seen a trend of higher deal values with lower volumes, mirroring the global M&A patterns. In the data center subsector alone, there were 113 deals worth US$29.5 billion in the first three quarters of 2024. The UK and Ireland have been key players in the market, with significant deals taking place in these regions.
Looking ahead, the future of the data center industry in EMEA looks promising. The rising demand for AI, cloud, and data services is expected to drive further investment in these facilities. With private equity firms sitting on record levels of funds, they are poised to seize opportunities in the data center market.
Despite the positive outlook, challenges such as power and land shortages loom over the industry. The need for substantial energy to operate data centers poses environmental concerns, especially in regions where grid capacities are limited. However, with government initiatives in countries like the UK and France supporting the growth of data centers, the industry is poised to overcome these challenges and continue its upward trajectory.
