The Madrid + Barcelona data centre market is growing rapidly as hyperscale cloud takes off, and in turn drives demand for colocation infrastructure. Most of the US-based hyperscale platforms – AWS, Google Cloud and Oracle Cloud – came online in 2022, and Microsoft Azure and IBM will also have stood up an initial tranche of infrastructure by the end of 2023. Only AWS has chosen to go the self-build path so far and the other hyperscalers seem keen to use third party colocation services to set up their cloud regions, although Microsoft is now also self-building to supplement third party providers.
Time to market is a high priority in this emerging market and Spain remains a place that can be difficult to navigate. Having in-country resources and expertise, and people on the ground who understand the regulatory landscape and local nuances, is immensely valuable and ensures a smoother path to market entry. Against this backdrop of accelerating demand and rapidly emerging hyperscale footprints, colocation capacity is expected to multiply quickly over the next five years. The growth potential in Madrid + Barcelona has widened the competitive landscape and drawn a number of global operators to the region in the hopes of capturing this lucrative opportunity.
There are other dynamics in play driving the market. Spain and southern Europe in general have started to emerge as overflow markets given the constraints emerging in the FLAP markets and Dublin, Ireland. Land and power are increasingly scarce in these markets and the regulatory landscape is tightening. Hyperscalers are looking for options and this has pushed demand to Spain where power is relatively more affordable and there are ample supplies of renewable energy resources. Spain itself is also emerging as a critical connectivity crossroads. Subsea cables continue to land on both sides of the peninsula, carrying traffic within Europe and on to both the Americas and MEA.
The data centre market in Spain is uniquely positioned amid several emerging tailwinds. Madrid has the potential to lead a second tier of markets in southern Europe, while Barcelona is emerging as a highly strategic connectivity hub that could serve as an alternative to Marseille in France. This is a market that is just getting off the ground and has its best days still ahead.
The Madrid + Barcelona data centre colocation market is still at a relatively early stage of development but is positioned to scale. At the end of 2023, the Madrid market is projected to be valued at €316.9m and grow at a five-year CAGR of 29.7%. The bulk of activity will continue to focus around Madrid. Inventory in Madrid — estimated to be ~127MW in 2023 — is expected to more than quadruple and reach 623MW between 2023 and 2028. In the same time frame, Barcelona will more than triple in size to 100MW.
This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in Madrid and Barcelona or find a service provider.
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