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Europe Data Center Colocation Market Forecast to Reach USD 46.51 Billion by 2031 as AI and Cloud Demand Accelerate

globenewswire.com
HPE Hewlett Packard Enterprise is mentioned as a collaborator in launching a sovereign AI platform in the UK, indicating their involvement in the growing AI infrastructure market. EQIX Equinix is listed as a leading operator in the Europe data center colocation market, which is experiencing significant growth driven by AI and cloud demand. DLR Digital Realty is identified as a leading operator in the Europe data center colocation market, benefiting from the overall market expansion fueled by AI and cloud services. VRT Vertiv introduced its CoolCenter Immersion system, indicating innovation and a response to the growing demand for advanced cooling solutions in data centers, particularly for AI workloads. AMAT While not explicitly mentioned, the article discusses advanced cooling and infrastructure for AI data centers, a sector where Applied Materials is a key player in supplying equipment for chip manufacturing. NVDA The article's focus on AI workloads driving data center development indirectly benefits NVIDIA, a primary provider of AI chips, by increasing demand for the infrastructure that supports their products. AMD The article's emphasis on AI workloads and high-performance computing indirectly supports AMD, a key player in AI chip development, by driving demand for the infrastructure needed to deploy their processors.

Europe Data Center Colocation Market Forecast to Reach USD 46.51 Billion by 2031 as AI and Cloud Demand Accelerate Dublin, Sept. 11, 2026 (GLOBE NEWSWIRE) -- "Europe Data Center Colocation Market - Industry Outlook & Forecast 2026-2031" has been added to ResearchAndMarkets.com's offering.

The Europe data center colocation market was valued at USD 11.65 billion in 2025 and is projected to reach USD 46.51 billion by 2031, expanding at a compound annual growth rate of 25.95%. Growth is being driven by artificial intelligence adoption, hyperscale cloud expansion, enterprise digital transformation and rising demand for secure, scalable and energy-efficient data center capacity.

Operators are accelerating investments across the United Kingdom, Germany, France, the Netherlands, Ireland, Spain, Italy, the Nordic countries, and Central and Eastern Europe. New developments increasingly prioritize AI-ready infrastructure, high-density racks, resilient power systems, renewable energy procurement and advanced cooling technologies.

AI Workloads Drive High-Density Data Center Development

Artificial intelligence and high-performance computing are reshaping data center design across Europe. The Netherlands ranked fourth globally in the Government AI Readiness Index 2025, with 95% of organizations operating AI programs. Government-led initiatives in Finland and France are also supporting wider AI adoption, while sovereign AI platforms and private infrastructure projects are creating additional demand for colocation capacity.

In January 2025, Data Center Partners announced plans for an AI-ready data center in Munich with more than 17 MW of IT capacity. In September 2025, UK-based Carbon3.ai launched a sovereign AI platform in collaboration with Hewlett Packard Enterprise and other technology companies. These developments illustrate the growing requirement for facilities capable of supporting intensive AI and machine learning workloads.

Liquid Cooling and Sustainable Infrastructure Gain Momentum

Rising rack power densities are accelerating the adoption of liquid-based cooling, direct-to-chip systems, rear-door heat exchangers and energy-efficient chillers. In November 2025, Vertiv introduced its CoolCenter Immersion system pod across Europe, the Middle East and Africa, supporting approximately 25 kW to 240 kW per system.

Mechanical infrastructure is expected to record strong growth as operators work to improve energy efficiency and reduce Power Usage Effectiveness. Electrical infrastructure will also account for a significant share of investment, including uninterruptible power supply systems, generators, switchgear, transformers, power distribution units and resilient distribution networks.

Heat reuse is becoming another important component of European data center sustainability strategies. In February 2026, nLighten signed an agreement to supply approximately 1.8 MW of recovered heat from its Stuttgart data center to the local district heating network. Borealis Data Center and Finnish utility Loiste Lampo Oy are also developing a heat-recovery project at the Kajaani campus, scheduled to become operational by May 2026.

Western Europe Leads While the Nordics Record Rapid Growth

Western Europe remains the largest regional market due to mature digital infrastructure, major internet exchanges, extensive subsea cable connectivity and a high concentration of hyperscale cloud regions. The United Kingdom is Europe's largest colocation market and is forecast to grow at a CAGR of 28.84%, supported by London's connectivity ecosystem, financial services industry and hyperscale availability zones.

Germany continues to attract investment around Frankfurt, while Madrid is strengthening its role as a Southern European digital hub. Milan is also benefiting from enterprise cloud migration and expanding hyperscale activity. Central and Eastern Europe is gaining momentum as operators diversify beyond established markets, with Poland leading regional investment and Austria and Czechia recording additional carrier-neutral and enterprise colocation development.

The Nordic region is emerging as Europe's fastest-growing data center colocation destination, supported by renewable energy, low-carbon electricity, favorable cooling conditions and growing AI infrastructure demand. Norway and Sweden continue to attract major projects, while Finland is expected to deliver the highest Nordic growth during the forecast period.

Competitive Landscape and Market Segmentation

The Europe data center colocation market remains highly competitive, with providers expanding through greenfield construction, acquisitions, joint ventures and AI-ready campus developments. Competition increasingly centers on high-density computing, liquid cooling, renewable energy sourcing, carrier-neutral connectivity, wholesale capacity and expansion into secondary European markets.

Leading operators include Equinix, Digital Realty, NTT DATA, CyrusOne, Vantage Data Centers, Telehouse, Global Switch, Colt Data Centre Services, Data4, AtlasEdge, EdgeConneX, Iron Mountain, STACK Infrastructure, VIRTUS Data Centres, Yondr Group, Green Mountain, atNorth, Kao Data, Bulk Infrastructure, QTS Data Centers, EcoDataCenter and CloudHQ. New developers and investors are also entering the market with hyperscale campuses, powered-land projects and sustainable AI infrastructure.

The market is segmented by retail and wholesale colocation; electrical, mechanical and general construction infrastructure; air-based and liquid-based cooling; Tier I through Tier IV standards; and geography. Retail colocation remains important for enterprises, financial institutions, healthcare organizations and public agencies, while wholesale demand is rising alongside hyperscale cloud and AI deployments.

Continued cloud migration, sovereign AI investment, sustainability requirements and demand for resilient digital infrastructure are expected to sustain Europe's data center colocation market growth through 2031.

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