London Data Center Market Market Size (2024 - 2029)

London Data Center Market Analysis

The London Data Center Market is expected to register a CAGR of 10.32% during the forecast period.

The main drivers anticipated to drive the market expansion are the increasing demand for energy-efficient data centers, considerable investment by colocation service and managed service providers, and expanding hyperscale data center building. Additionally, the development of big data, cloud computing, and the Internet of Things (IoT) has made it possible for businesses to invest in new data centers to preserve business continuity. 

• Additionally, industrial development is expected to prosper due to the rising need for security, operational efficiency, improved mobility, and bandwidth. Software-based data centers boost industry growth by providing a higher level of automation.
• London significantly influences the UK data center construction market's success. London is meant when they claim that the UK is home to one of the world's most significant data center clusters. London dominates Europe, with many data centers in the region. The data center industry has profited from demanding clients, which has led to coevolution in technical and operational capabilities. London is a significant global financial and economic hub. It is no coincidence that London has a top-tier financial sector and a top-tier data center construction industry.
• The market has been witnessing various expansion activities, partnerships, and collaborations by vendors to expand its geographical presence and enhance its position in the market. For instance, in March 2022, a Colocation firm Telehouse opened its fifth data center in London Docklands, claiming it would be the company's largest global facility. The firm has invested USD 273 million in the Telehouse South facility, which is expected to comprise 12,000 sqm of colocation space and provide power capacity for 18MW of IT infrastructure.
• Further, data center contribution to the nation's economy is expected that the government will develop new policies towards new data center construction players to enter the United Kingdom region. For instance, according to the digital strategy report from the united kingdom government. Stated that data centers support the internet economy, which accounts for nearly 16% of the national GDP, 10% of employment, and 24% of all UK exports, and is expanding more quickly than any other G-20 economy. While the annual GVA contribution of an existing data center is estimated to be between USD 360 million and USD 396 million, each new data center ranges from USD 492 million to USD 540 million. These are expected to drive the market in the city.
• Moreover, the rise in the implementation of digital transformation towards various government services is expected to drive the data center construction market in London City. For example, Over the past ten years, there has been a significant digital transformation of public services, including automation and AI. One Login for Government150, the use of data in the social care system, and the Home Office's (HO) Future Borders and Immigration reforms are just a few examples of the digital advancements made by the government. Opportunities for automated adoption are also being investigated, such as by the Home Office using visas and electronic travel authorizations.
• On the flip side, Data centers are incredibly electro-intensive, even though condensing digital activity into purpose-built facilities is far more efficient than traditional operational models with IT housed on office premises in server rooms. As a result, energy costs account for a considerable amount of turnover. The industry already has a Climate Change Agreement that requires public reporting of electricity and primary energy consumption. However, the CCL (Climate Change Levy) discount only partially tackles the widening gap in electricity prices between the UK and rival markets, particularly in Europe.

London Data Center Industry Segmentation

A data center is a physical room, building, or facility that holds IT infrastructure used to construct, run, and provide applications and services and store and manage the data connected with those applications and services.

The London data center market is segmented by dc size (small, medium, large, massive, mega), tier type (tier 1&2, tier 3, tier 4), absorption (utilized (colocation type (retail, wholesale, hyperscale), end user (cloud & IT, telecom, media & entertainment, government, BFSI, manufacturing, e-commerce)), and non-utilized). The market sizes and forecasts are provided in terms of volume (MW) for all the above segments.