Capital costs to develop EMEA data centre pipeline reach US$ 562 billion amidst escalating infrastructure demands

Dubai, UAE | 14 October 2025: Global property consultancy, Knight Frank, has launched its latest ‘EMEA Data Centres Report’, revealing that the region’s data centre sector requires more than US$ 560 billion in development capital to fund the development pipeline, including the US$ 162 billion announced in the first half of 2025 alone.

EMEA’s operational data centre stock is now valued at more than US$ 300 billion, reflecting its current income-generating potential, and this figure is expected to grow by 11.4% in 2025.

DIGITAL DEMAND DRIVES UAE GROWTH 

The Middle East is fortifying its leading position in the data centres ecosystem. In the UAE, live data centre capacity surpassed 376MW, with the addition of 19.2MW of new capacity coming online in 2025. This growth has been powered by a surge of investment as both Dubai and Abu Dhabi seek to establish themselves as digital powerhouses.

Most notably, OpenAI has named Abu Dhabi as a site for its global ‘Stargate’ platform, while Microsoft and du have announced a US$ 544m hyperscale facility in Dubai.

Government demand is a key driver. For example, the Abu Dhabi government’s Digital Strategy 2025-2027 is a US$ 13bn program that mandates sovereign cloud adoption, digitisation and AI deployment across more than 200 government solutions.

Despite the wave of development, available capacity is limited. Vacancy rates in the UAE sit at just 2.4%, one of the lowest in the EMEA region, underscoring the strength of demand from AI-driven and hyperscale operators establishing a regional foothold.

An ongoing focus on sustainable data-infrastructure development points to further expansion in the coming year, reinforcing the UAE’s role as a digital hub connecting Europe, Asia and Africa.

 RAPID GROWTH, RISING DEMAND IN EUROPEAN HUBS 

In Europe, Paris has emerged as both the fastest-growing hub and one of the largest sources of new capital demand. The capital requirement now stands at approximately US$ 43bn, and total supply has risen by 75.1% to almost 3.4GW. Frankfurt leads the region for leasing activity, with 207MW of take-up recorded over the past 12 months – of which, 159MW was completed in just the last two quarters.

London continues to dominate as the largest market in the region, requiring over US$ 58 billion in development capital and with a market valuation estimated at US$ 42 billion.

 CAPACITY CRUNCH ACROSS EMEA

Supply is struggling to keep pace with demand. The live colocation vacancy rate across EMEA currently stands at 9.5%. However, this drops sharply to 5.2% for requirements over 2MW and to just 2.9% for requirements above 5MW.

In key markets such as the UAE (2.4%), Paris (3.4%) and London (5.9%), vacancy is already well below the regional average. Availability of near-term large-scale capacity is either extremely limited or non-existent.

Pre-leasing is intensifying the pressure. More than half of all capacity currently under construction (55.2%) has been pre-let, while 22.1% of committed capacity has also been secured. Dublin, Milan and London are clear examples of demand outstripping supply, with pre-leasing rates at 94.8%, 92.6% and 87.8%, respectively.

Stephen Beard, Lead Partner - Global Head of Data Centres, said: “The story of 2025 so far is one of scale colliding with scarcity. We are seeing record levels of supply delivered and planned across EMEA, yet demand from AI and cloud is growing even faster. Markets like Paris, London and Frankfurt are expanding at pace, but vacancy rates and pre-leasing levels reveal just how little truly available capacity remains.” 

Alex Burgoyne, Head of Data Centres Valuation & Advisory, added: “AI continues to be a defining force, shaping the EMEA data centre landscape. What was once a secondary driver is now moving centre stage, reshaping investment strategies and pushing governments, hyperscalers and operators to act faster. This shift is creating both opportunity and challenge as the region races to keep up.” 

Knight Frank’s findings highlight a market defined by escalating investment requirements, rapid expansion and mounting scarcity. AS AI and cloud adoption accelerate, EMEA’s data centre sector is set to remain at the forefront of global growth, but capacity constraints in leading hubs point to an increasingly competitive landscape.

Glossary

• A megawatt (MW) is a unit of power equal to one million watts and, in data centre terms, usually refers to the amount of IT load or computing power that can be supported.

• A gigawatt (GW) is a unit of power equal to one billion watts, or 1,000 megawatts, and is used to measure large-scale aggregate or regional data centre capacity.

• Live IT capacity refers to the amount of IT power that is currently operational and available for use within data centres.

• Aggregate supply describes the total power capacity, both live and planned, across a given market or region.

• Take-up refers to the volume of data centre capacity leased or contracted by occupiers, such as cloud service providers or enterprises, within a specific period.

• Pre-leasing is the share of under-construction or committed capacity that has already been leased before it becomes operational.

• Vacancy rate is the propertion of live colocation capacity that remains available for leasing.