Warsaw is a magnet for data centers [REPORT]

Cloud computing, AI and 5G accelerate the growth of data center development around the world. Increased demand for IT services and the rapid growth of e-commerce are the key drivers of the growing interest of global tech companies in Central and Eastern Europe (CEE). Warsaw is a hotspot for data center development, says a report from global real estate services firm Cushman & Wakefield.

Report on data centers in Central Europe

According to the firm’s Data Centre European Secondary Markets report, Warsaw has received considerable interest from hyperscalers, developers, and across the greater ecosystem as each determines how best to service Central and Eastern Europe. As the largest city in Poland (and among the largest regionally), Warsaw has attracted considerable investment from international companies, headlined by Microsoft’s recent decision to invest over $1 billion in local infrastructure, training, and cloud services for enterprises and government.

Not to be outdone, Google has made their own $2 billion investment announcement, expecting their own cloud region and associated infrastructure to go live in 2021. Global data center REIT Equinix has three locations in Warsaw, and international edge player EdgeConneX is a more recent entrant that has announced relationships with Megaport and Ori Industries for improved local connectivity. These companies are joined by Italian cloud firm Aruba, locally-based Atman with two large facilities, and a host of smaller operators. Of note is American hyperscale operator Vantage, who plans on entering the market in 2021 with the first phase of a campus that will span 64 MW at full build-out, or double the current market size.

We are now witnessing a revolution in data center development. Large companies and governments alike continue their technological transformation on an even larger scale. This is also illustrated by figures - hyperscale cloud spend alone was an €8.7 billion business in 2019, with an anticipated rise to an incredible €50 billion by 2024. Paradoxically, the pandemic crisis is likely to accelerate this transformation as a host of new locations have joined the data center landscape across Europe and the world. Tech companies are now focused on European capitals such as Warsaw, Vienna, Madrid, Berlin and Prague.

Investments in data centers in Poland

Data Centers, once an afterthought for global enterprises, are now a cornerstone of the information economy, and well over $100 billion has poured into the asset class over the past decade, according to Cushman & Wakefield's Global Data Center Market Comparison report. The 2020 pandemic accelerated the change in corporate IT strategy, as companies rapidly shifted to the cloud. Continuation and optimization of this shift will continue throughout the next several years, creating further emphasis on cloud services availability and data center development.

We should remember that data center operators report non-standard expectations – such facilities have to meet specific technical requirements for security, availability of utilities and distance from large city centers.

Construction of new product has skyrocketed, with the 1.6 GW under construction across markets studied last year swelling to 2.9 GW this year. Emerging markets continue to grow in importance, with areas particularly in Europe and Asia of interest as some workloads move to the edge. These secondary locales often provide greater margins for data center operators, with some growing to primary market status in future. Read more in Cushman & Wakefield's Data Centre European Secondary Markets report.

Looking ahead, Poland’s data center development potential is likely to grow. In addition to such advantages as Poland’s geographic position in Europe and competitive land prices in comparison with other countries, there is also developers’ growing experience in delivering such projects and the experience of the government and utility suppliers who are critical in such undertakings - says Kamil Żach, Senior Negotiator, Industrial & Logistics Agency, Cushman & Wakefield.

Global data center report

The Global Data Center Market Comparison is the first data center report of its kind, openly discussing and ranking top markets for site selection and investment. This study reveals the thought process that underpins all data center work on behalf of our clients at Cushman & Wakefield, providing a rigorous and analytical approach for maximum value.

The study evaluated 1,189 data centers around the world, utilizing a unique weighted methodology to rank 48 global markets and arrive at our Overall Top Ten markets. Key emerging data center markets are also identified in the Ten Markets to Watch section.

Open the report on the global Cushman & Wakefield website