Description
The Madrid + Barcelona data centre market has grown rapidly as hyperscale clouds have landed in a market with plenty of land and renewable energy as well as excellent subsea cable connectivity. Madrid is the hub of Iberia, which is an ideal geographic location at the crossroads of where Europe and the US meet Africa, and the closest part of the EU to Africa and Latin America. Public cloud adoption is still in the early stages but building fast, and Madrid has a strong digital media sector. Madrid+Barcelona is well placed to handle spillover demand from the constrained FLAPD markets as well as companies wanting to serve Africa from a European base, while the renewable energy story and lower power pricing than much of the rest of Europe are already attracting AI deals.
The market is not without its challenges. Permitting procedures and power allocations are complex and lengthy, and the sheer volume of demand has caused significant disruptions to the latter, especially in Madrid. The market has quickly become constrained as power supply failed to meet demand and, instead of being able to act as an overflow market, in the short term some Madrid demand may actually overflow to other markets in southern Europe including Milan. Madrid is also competing with other areas of Spain, notably Zaragoza where AWS has self-built for its Spain cloud region and Microsoft is planning to do the same for a second in-country region.
Some planned builds and expansions in Madrid have been pushed out as promised power hasn’t been delivered, many new projects are essentially in a holding pattern, and some operators considering the market may abandon their plans. Financial requirements have now been imposed to deter speculative power requests, and the next wave of allocations should finally happen this year to give some much needed clarity to the market. It will take time for new capacity to come online and, in the meantime, it is very much a seller’s market.
The power problems and self-builds haven’t impacted demand in Madrid and Barcelona, both of which have attracted plenty of newcomers from global players to local developers and companies with access to power. Some of these have little data centre experience and may not get off the ground while others are more credible but, without global data centre platforms, may struggle longer term.
Madrid is a leading contender in the next tier of data centre markets in Europe, while Barcelona is fast becoming a connectivity hub as an addition to constrained Marseille. Madrid built-out capacity is expected to grow sevenfold from the end of 2024 to 2030 when it will tip over 1GW. The Barcelona market will grow fivefold over the same period to exceed 225MW.
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. Structure Research now has DCI reports for the European FLAP markets plus Milan and Madrid in southern Europe, as well as a new DCI Market Spotlight report on Rome.
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