How often have you heard the term ‘artificial intelligence’ over the past week? Ten times? Twenty times? Certainly more than that. AI is on everyone’s lips – in the media, in political discussions and in almost every business meeting. But whilst most people are talking about chatbots, automation or neural networks, property professionals would do well to take a completely different perspective: on the physical location that makes all of this possible in the first place – data centres.
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The appetite for data in our time is enormous. In 2017, global data volume stood at around 26 zettabytes (that’s 26 billion terabytes). By 2022, this had already risen to 104 zettabytes, and forecasts suggest it will grow to around 284 zettabytes by 2027. This growth is driven by technologies such as AI, machine learning, 5G, autonomous driving and the Internet of Things. Billions of sensors generate data streams on an unimaginable scale every day.
This data must not only be stored, but also processed – and that is precisely why data centres are needed.
Market overview
According to a recent analysis by Cushman & Wakefield, the operational capacity of data centres in Europe, the Middle East and Africa reached around 10.3 gigawatts in the summer of 2025 – an increase of 21 per cent on the previous year. By way of comparison, one gigawatt is equivalent to the output of a large nuclear power station.
In addition, a further 2.6 gigawatts are under construction and over 11 gigawatts are in the planning stage. Total capacity is expected to rise to over 24 gigawatts in the coming years. Germany is the second-largest market in Europe after the UK – a clear indication that the sector is in the midst of a phase of exponential growth.
What makes data centres so special?
At its core, a data centre is nothing more than a highly specialised server facility. However, the requirements for power supply, cooling, security and operational reliability are extreme. There are essentially three types:
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Colocation centres: Companies rent server space, much like traditional office space.
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Hyperscalers: Giants such as Amazon, Google and Microsoft build and operate their own centres.
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Enterprise centres: Large organisations, such as banks or insurance companies, operate in-house data centres.
Colocation centres are particularly attractive to investors and developers, as they represent a clear property typology with a rental model – albeit one with highly technical requirements.
Germany’s locational advantage
By international standards, Germany offers excellent framework conditions: political stability, a reliable electricity grid, a central location in Europe and no fewer than five international internet exchange points. Frankfurt is even home to the world’s largest internet exchange point, the DE-CIX.
Furthermore, the high data protection standards of the GDPR make the country an attractive location – particularly for companies that process sensitive data.
Sustainability as both an obligation and an opportunity
From 2025, new regulations on efficiency and sustainability will come into force in Germany. Operators must utilise waste heat, disclose the proportion of renewable energy used and use electricity particularly sparingly. For investors, this means that only modern, energy-efficient properties will stand the test of time.
What may initially sound like regulation is, in fact, a competitive advantage: those who build more sustainably not only reduce operating costs but also increase their appeal to international tenants.
Returns above the industry average
The global market for data centres is set to grow to a value of over 480 billion US dollars by 2029. In Germany, investments of around 24 billion euros are expected. Double-digit returns are not uncommon – significantly higher than in the traditional office or retail sectors.
However, the lion’s share of the costs is accounted for by technology: cooling, emergency power, security and IT systems. This makes asset management complex, but also highly specialised.
What property professionals should look out for
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Specialisation is essential:
Data centres are not a by-product of traditional property development. Anyone wishing to invest in this sector needs technical expertise – or partners who possess it. -
Locations with a future:
Frankfurt remains the most important market, but space and electricity capacity are in short supply. Opportunities are emerging in Berlin, Munich, Hamburg and Düsseldorf – where new clusters are taking shape. -
Building partnerships:
Energy suppliers, operators and IT service providers are key players. No project can succeed without them.Anyone entering this market should also build up in-house expertise so they can have a say – because without technical understanding, you’ll quickly find yourself on the sidelines of your own project.
Conclusion: The infrastructure of the future
Data centres are the backbone of the digital economy. Without them, there would be no artificial intelligence, no cloud and no digital transformation. Germany plays a leading role in this sector – with enormous growth potential, but also high demands.
The barriers to entry are considerable, and the investment sums involved are high. For institutional investors, family offices and specialist project developers, however, entering this market can be worthwhile. Those who build up expertise in good time, forge partnerships and take sustainability seriously will position themselves within one of the most exciting asset classes of our time.
