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Frankfurt DCI Report 2022: Data Centre Colocation, Hyperscale Cloud & Interconnection

December 15, 2022

Frankfurt is the second largest of the four FLAP (Frankfurt, London, Amsterdam, Paris) data centre markets in Europe and one of the largest in the world. The current built-out capacity in the market is approaching 650MW and this number is expected to effectively double by 2024-25.

The Frankfurt colocation market is healthy and tracking steadily. The market will be worth €924.5b in 2022 and is projected to grow at a 5-year CAGR of 28.1%. Hyperscale is a driving force behind this growth. All of the major US-based platforms are live in Frankfurt, with AWS first landing here in 2014. Frankfurt has been one of the only European markets of choice for Chinese hyperscale platforms and is also home to a good portion of the growing subscale cloud market. On a revenue basis, hyperscale now accounts for 67% of the market and this is projected to hit 85% in 2027.

It will not be all smooth sailing. The current geopolitical and pandemic environments have created a number of challenges. Construction timelines are being pushed out and costs are rising on the back of global supply chain issues compounded by lack of skilled labour and the sheer volume of developments underway. And as is the case elsewhere in Europe, energy prices are skyrocketing. All this is happening as the market is seeing more constraints from a land and power perspective, which is pushing new projects further outside the existing main data centre clusters.

Against this backdrop, hyperscalers are having to adjust and be more flexible around AZ architectures. Meanwhile the regulatory environment is tightening already strict environmental controls and bans on new builds in certain areas are now in place. To this point, and unlike a market like London where there are early signs of self-build activity, hyperscalers have not yet chosen to self-build and this has kept the demand pipeline primed.

Frankfurt has all the core fundamentals that drive data centre and hyperscale growth and there is significant upside given that it is in a relatively early stage of cloud adoption. Unlike the UK, and more like France, Germany has been a later and more conservative adopter of cloud-based infrastructure and it is only starting to push towards the large US-based platforms. Given a strict data sovereignty regime, demand is likely to stay in-country and organisations looking to serve this market will invariably have to set up infrastructure in Germany. This will ensure a steady flow of demand into the market.

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 Frankfurt or find a service provider. The methodology applied continues to be the most robust in the industry. We track supply on a space and power basis, split all the metrics along retail and hyperscale lines, and aggregate inventory in multiple tiers according to build status, absorption rates and maximum capacity levels. Hyperscale cloud nodes and on-ramps are mapped and a complete directory is provided.

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