Data Centre Outlook
H2 2021

• Demand reaches yet another record in 2021, led by large cloud and tech company expansions
• M&A hit new heights with record-breaking acquisitions in 2021
• Goals for sustainability make way as metrics evolve
• The global construction pipeline remains robust

Despite significant supply chain disruption from the pandemic and the Omicron surge, the data centre sector was buoyed by multiple billion-dollar deals in 2021. These mega deals enable prominent players with strong financing to scale rapidly and allows them to enter new markets across regions.

The performance of top major data centre REITs, which are the major operators and providers of data centre space globally, reflects the reentry and reopening of economies. Residential and retail recorded the highest returns in 2021, while the combination of remote work, projected increases in IT spend, and even e-sports, have contributed to robust demand.

As major multinational companies across industries strive to meet and exceed Environmental, Social, and Governance (ESG) goals outlined in annual sustainability reports, data centre operators must complete their own targets while helping customers exceed theirs.

There are various metrics that operators are using to track factors like data centre power consumption, carbon emissions, and electronic waste. PPA (Power Purchase Agreement), REC (Renewable Energy Certification), and CCA (Community Choice Aggregation) are popular methods for data centre operators to enhance their renewable energy portfolios and lower their carbon footprint.

Demand for data centres reached yet another record in 2021. Scroll to see regional performance.

Core markets in Europe met earlier projections and recorded 219.3 MW in absorption, and preleasing activity has picked up across Frankfurt and Paris. 

In the United States, absorption reached a mammoth total of 885.7 MW across 14 domestic markets, a 44.3% increase year-over-year.

The global construction pipeline hit a new record in 2021 despite supply chain disruptions and project delays. The pipeline in the United States remained strong, while the European pipeline decreased about 34% year-over-year. In India, Mumbai leads the way in development, driven by significant land acquisitions by hyperscalers in 2021.