Tuesday, 20 October 2026
Europe’s data centre market is attracting substantial investment as artificial intelligence increases demand for computing capacity. International operators are expanding their portfolios, while electricity shortages and rising construction costs are changing where new facilities can be developed. This shift could create opportunities for Central and Eastern Europe, although questions remain about whether investment returns will justify the capital required.
Digital Realty and Equinix are among the companies expanding their infrastructure portfolios. Digital Realty increased its 2026 revenue forecast to between $6.85 billion and $6.95 billion following its second-quarter results. The company also continued investing in acquisitions and development sites, including three operational facilities in Northern Virginia valued at approximately $7.8 billion, alongside projects in Kansas City and Marseille.
Equinix reported second-quarter revenue of $2.63 billion, an annual increase of 16%, while operating income rose by 35%. The company also improved its financial outlook and expects capital expenditure of between $5 billion and $6 billion during 2026. These commitments demonstrate the financial scale of expanding infrastructure for cloud computing, corporate customers and artificial intelligence applications.
The expansion is benefiting equipment suppliers. Schneider Electric reported third-quarter revenue of approximately €11.5 billion, representing organic growth of 17%, and increased its full-year expectations. Demand for electrical infrastructure supporting data centre development contributed significantly to its performance, demonstrating how investment in computing facilities is generating business before new centres become operational.
European property research indicates that suitable data centre capacity remains limited. CBRE expects vacancy across major European markets to approach 6% by the end of 2026. Electricity connections, construction requirements and planning procedures are restricting the delivery of additional facilities, encouraging developers to consider locations beyond established technology centres.
Frankfurt, London, Amsterdam, Paris and Dublin remain Europe’s principal data centre markets, with approximately 3.8 gigawatts of operational capacity during the first half of 2026, according to JLL. However, the availability of electricity and development land is increasingly influencing investment decisions. JLL estimates that major projects planned for 2026–2028 will be located an average of 175 kilometres from established metropolitan centres, compared with 46 kilometres for developments completed between 2022 and 2025.
Land costs provide another incentive to examine alternative locations. Research cited by Reuters indicates that suitable development land costs approximately €2.36 million per megawatt of computing capacity in established European markets, compared with around €978,000 in secondary locations such as Warsaw. However, lower land prices may be offset by additional expenditure on electricity connections and telecommunications infrastructure.
For Central and Eastern Europe, these changes could create new investment opportunities. Poland is already recognised as an important secondary market, with Warsaw benefiting from established telecommunications infrastructure and business demand. The Czech Republic, Slovakia, Romania and Hungary could also attract interest, particularly where industrial locations provide suitable land and reliable electricity supplies. Their competitiveness will depend on grid capacity, fibre connectivity, planning conditions and the availability of customers prepared to make long-term commitments.
Despite strong demand, data centre development carries considerable financial risks. Investors must finance land, construction, electrical equipment and cooling systems before facilities generate income. Projects designed for artificial intelligence applications may require particularly high electricity capacity, increasing development and operating costs. Delays in securing power connections or customers can further affect financial performance.
There is also an important distinction between equipment suppliers and property investors. Manufacturers can benefit from construction activity as orders are placed, while data centre owners must recover their investment through income generated over many years. Strong demand for infrastructure equipment therefore does not automatically guarantee attractive returns for the owners of completed facilities.
Customer commitments and technological changes introduce additional uncertainty. Large facilities may depend on a limited number of technology companies occupying substantial capacity, while future advances in computing could alter infrastructure requirements. Investors must therefore assess long-term demand, operating efficiency and the financial strength of customers alongside construction costs.
Europe’s data centre industry is entering a more demanding stage of development. Artificial intelligence is supporting substantial investment, but electricity availability, infrastructure costs and sustainable financial returns will determine which projects proceed. Central and Eastern Europe could benefit from the search for alternative locations, provided individual markets can offer the infrastructure and commercial conditions required by international operators.
Source: CIJ.World Research & Analysis Team
