Data Center Outlook 2021
Skyrocketing demand for cloud technology leads to a strong start in 2021
- Financial, tech and healthcare companies drive data center spending and enterprise-level demand
- Sustainability takes center stage amongst data center providers and occupiers
- Investment and M&A hit new heights with record-breaking deal
- The global construction pipeline remains robust
Data center’s outlook is optimistic
Skyrocketing data usage, including streaming services and virtual connectivity, caused record demand for data centers in 2020, and the first half of 2021 got off to a strong start as well.
The top major data center REITs, which are the major operators and providers of data center space globally, saw a strong resurgence in enterprise-level demand, driven by financial, technology and healthcare companies. The increased activity reflects the evolving landscape of the pandemic and the global progress on vaccine administration and restriction lifts.
The green gain
With health and wellness and sustainability at the forefront of many corporate agendas, the data center industry is feeling the heat to use more efficient systems, renewable energy and carbon-cutting practices.
What does this look like for data centers?
Here are three ways data centers are creating a greener industry and more sustainable world:
Global state of the industry
Demand for data centers is on pace for another strong year in 2021. Scroll to see regional performance.
In the United States in the first half of the year, absorption reached 273.6 MW across 14 domestic markets, the second-highest amount on record going back to 2018.
In Europe, London continues to lead the region in demand, largely driven by cloud companies.
Last year was a record-breaking year for mergers and acquisitions and data center investment. While activity is below last year’s pace, the industry still recorded the largest data center deal ever in June of 2021.
The overall construction pipeline in North America is expected to grow throughout the year to meet increasing demand from cloud and technology companies, while in Europe, the pipeline virtually stayed the same in the first half of 2021 compared to year-end 2020.