Spain’s data centre capacity is concentrated in Madrid, which as 91% of its 113 MW, according to local association DC Spain.
That figure, for fourth quarter of 2021, is expected to grow exponentially, with an average annual increase of 43% until 2026. Twenty-seven percentage points above the average increase of the FLAP markets (Frankfurt, London, Amsterdam and Paris).
Spain is becoming increasingly important as a global data centre destination thanks to intercontinental submarine cable developments that connect it with North America, South America, Africa and Europe.
The Marea cable, developed by Microsoft, Meta and Telxius, goes to the US while the EllaLink cable connects to Brazil.
Gran Hopper, a subsea cable linking the US, UK and Spain is Google’s first-ever route to the latter. The Spanish landing point integrates the new Google Cloud region in Madrid into more tightly. Google’s global infrastructure
2Africa, a cable developed by Meta and a consortium of telecom operators, connecting Africa, Asia and Europe with a landing point in Spain, is set to go live in 2023.
Big players such as Amazon, Google, IBM, and Meta are setting up data centres, including the Google Cloud Region, which was launched in May, and the forthcoming opening of Amazon Web Services Region in Aragón .
IBM has announced the largest investment in its history in Spain with the creation of a Multizone Region in Madrid, which will consist of three data processing centres expected to become operational in 2023.
The project will be developed on a 225,000-square-metre site and will consist of 10 buildings with a capacity of 10 megawatts each. The project will start with an available power of 40MW and has an estimated capacity of 100MW.
Finally, Meta has announced plans for a €1 billion data centre campus in the Castilla-La Mancha region.
The public sector is also promoting the development of infrastructure and connectivity ecosystem. The Madrid region is launching several projects to steer to transform the capital into a major digital centre in southern Europe. One of the projects is a €68 million investment on the construction of a green data centre, a high-performance data processing centre.
Exponential increase in data traffic is driving strong demand for centres while supply is scarce resulting in bright opportunities for real estate investors who are starting to turn their attention to the sector in Spain.
In 2021, the Spanish REIT Merlin Properties partnered with Edge Energy, a subsidiary of Endeavour to build data centres across the Iberian peninsula in Madrid, Barcelona, Alava in the Basque Country and Lisbon. Phase I and II will amount to around 70MW and will involve €596 milion capex.
It has prelet 2MW of the data centre in Alava, which is expected to start operating by 2023. The contract has been concluded on a long-term basis, with a term of 45 years.
Global real estate specialist Thor Equities Group has signed this year a contract to acquire and develop a €600 million data centre facility in Madrid called Madrid One. It is the first asset in the firm’s new specialised division, Thor Digital.
The trend being seen in Spain is a global phenomenon with investment in data centres across the world more than doubling in 2021 and a similar trajectory predicted for this year, according to a report from DLA Piper.
The value of investment in global data centres more than doubled in 2021 to $53.8 billion, while the number of transactions reached 113 in 2021, a 64% annual increase, according to DLA Piper'sThe meteoric rise of the data centre: Key drivers behind global demand.
DLA Piper says the extraordinary growth of data centres continues, with 41 transactions, worth $21.3 billion, in the year to 7 June 2022. That is an increase of 100% compared to the same period last year and almost as much as the combined annual value seen in both 2019 and 2020. Future growth is expected to be focused in China, India and the US.