The EMEA data centre market is tightening rapidly, with demand continuing to outpace supply across many of its most established hubs. 

That’s according to recent data from JLL, which showed vacancy rates at the end of 2025 across the FLAP-D markets of Frankfurt, London, Amsterdam, Paris and Dublin fell to a record low of 6.3% in Q4 2025, down sharply from 16.9% in 2021. 

At the same time as the record-low vacancy rates, the data showed that 83% of the pipeline is already pre-let, underlining just how difficult it is becoming for occupiers to secure meaningful capacity in Europe’s core colocation markets.

It’s not exactly surprising to see vacancy rates hit record lows, as the demand for AI continues to dominate the market. That’s one of the key reasons we’re seeing more proposals for new build data centres – especially as many legacy facilities aren’t capable of supplying the capacity that is needed by some of the larger AI companies that are scrambling for space. 

In fact, finding contiguous space of 10MW or more is becoming increasingly difficult, with many occupiers now forced to focus on pipeline capacity rather than existing availability. 

It’s not the first time we’ve written about demand outstripping supply. In October 2025, property consultancy Knight Frank found the same scenario playing out. It estimated that the industry would need to spend £422 billion in capital investment just to deliver the capacity that was required. 

Thankfully, at least some of that money is being sent to get the industry out of the supply squeeze. According to JLL, the FLAP-D markets have continued to grow, with combined live capacity having risen from 1.8 GW in 2019 to 3.6 GW in 2025, more than doubling in six years. That growth has come despite ongoing regulatory and grid headwinds, with Frankfurt and London in particular benefiting from constrained supply elsewhere in the region.

Ireland, meanwhile, may now re-enter the conversation in a more meaningful way. In December 2025, Ireland’s Commission for Regulation of Utilities lifted its moratorium, although any new data centre seeking a grid connection must now install on-site generation or battery systems capable of meeting its full electricity demand. That is hardly a free pass, but it does at least reopen a market that had effectively been closed off.

We’ve already seen how data centres in Ireland have been taking novel approaches to come online, and it’s likely we’ll see more of this in other markets as capacity constraints on the electrical grid continue to plague the region. 

Pre-leasing becomes the norm

One impact that the squeeze on available capacity is having is the change in how occupiers are approaching the market. London has 302 MW in its pipeline, with Frankfurt close behind on 279MW, but with vacancy at current levels, pre-commitment is increasingly becoming the only viable route to securing space at scale.

That is a notable shift. Pre-leasing was once a strategy used by the largest and occupiers; it is now starting to look more like a basic requirement in Europe’s biggest markets. 

The AI effect is only intensifying that pressure. The report suggests AI could account for half of all data centre workloads by 2030, while signings for AI capacity from neocloud providers almost tripled across Europe in 2025. Inference workloads are also expected to overtake training by late 2026, which could have major implications for where demand shows up next.

Training clusters have so far tended to favour larger, well-connected markets with access to significant power. Inference is likely to be more geographically distributed, pushing demand into newer and secondary locations as operators look for lower-cost land, power availability and faster deployment routes.

Middle East pipeline surges ahead

While Europe is grappling with tight vacancy and expensive powered land, the Middle East is moving into a new phase of expansion. Across nine metros, the region now has around 1 GW of existing capacity, with 2.2 GW under construction and a further 12 GW planned.

That scale of pipeline suggests the market is no longer simply emerging; it is beginning to establish itself as a serious regional growth story in its own right. The UAE remains the most established market, with Abu Dhabi and Dubai accounting for 602 MW of total capacity, but Saudi Arabia is closing the gap quickly. Riyadh alone has 1.4 GW under construction and another 5.2 GW planned, reflecting the scale of the Kingdom’s sovereign-backed ambitions.

That growth could be threatened amidst the Iranian conflict, however. That’s because Iran has made no secret that it could opt to target data centre facilities in the region. In a recent video release, the Iranian Government threatened to ‘destroy’ OpenAI’s planned Stargate data centre in Abu Dhabi if the US attacked the country’s power infrastructure. 

Despite the threats, it’s already clear that markets outside of FLAP-D will grow in popularity. That’s because Europe’s cost dynamics are pushing development outward. According to JLL, powered land in primary markets commands an average premium of 1.7x over secondary markets and 3.1x over tertiary locations, with the gap reaching as high as 8.8x in the UK. With connection lead times in some established hubs stretching to a decade, the economics are becoming harder to ignore. 

That does not mean primary markets are about to lose their appeal. Latency, connectivity and customer proximity still matter, and they will continue to anchor many deployments to major hubs. But with vacancy at record lows, project sizes increasing, and more than half of forecast AI growth expected to land in the Nordics and Tier 2 markets, the balance is clearly beginning to shift.