Europe’s data centre market enters a new infrastructure cycle, where delivery capacity defines growth potential.
The European data centre sector is entering a new infrastructure cycle following a year of recalibration, according to the latest report from Rider Levett Bucknall (RLB). While demand for digital infrastructure continues to accelerate, the defining factor for success across the digital construction sector is shifting from demand generation to delivery capability at scale.
Drawing on insights from over 700 senior decision-makers across the UK and Europe, the report identifies a market returning to expansion, with operators expected to commission 42% more capacity in 2026 compared to 2025. This represents a 319% increase since 2023, signalling sustained growth across the European data centre construction pipeline.
Data centre demand driven by AI, cloud and emerging technologies
The report highlights that artificial intelligence is now the primary driver of data centre demand, cited by 45% of respondents. However, growth is increasingly diversified across multiple digital infrastructure drivers, including 5G and 6G networks (41%), cloud computing (38%), high-performance computing (33%), and sustainable IT initiatives (32%).
This broad-based demand reinforces the need for scalable, resilient, and future-ready data centre construction strategies. For digital construction professionals, this translates into increased complexity in design, procurement, and project delivery, particularly as facilities become more power-dense and bespoke.
Delivery constraints threaten data centre expansion
Despite strong demand, Europe’s data centre expansion is constrained by structural delivery challenges. Access to power remains the most significant barrier, cited by 35% of respondents, followed by permitting delays (33%) and pressure on materials, equipment, and specialist labour (29%).
These constraints are reshaping how digital infrastructure projects are planned and executed. Securing grid connections, negotiating private power purchase agreements (PPAs), and integrating energy solutions into early-stage planning have become critical components of data centre development strategies.
In parallel, 63% of respondents expect data centres to increasingly co-locate with advanced facilities such as semiconductor fabrication plants, AI and quantum laboratories, and energy storage assets. This reflects a shift towards integrated digital and energy ecosystems.
Energy strategy and relocation trends in European data centres
Energy availability is driving geographic diversification across the European data centre market. While traditional FLAP-D hubs remain important, emerging locations such as the Nordics, Spain, Italy, and Poland are gaining traction due to improved access to power, streamlined permitting, and long-term sustainability potential.
Alternative energy adoption is also accelerating. Around 69% of respondents expect private PPAs, on-site solar generation, and battery storage systems to reduce reliance on constrained public grids within the next three years. This trend is reshaping data centre site selection and design, placing energy resilience at the centre of digital construction planning.
Supply chain pressures and cost escalation in data centre construction
The report identifies ongoing cost escalation across key components of data centre infrastructure. Battery energy storage systems (BESS) are expected to see the highest price increase at 4.3%, followed by copper cabling at 4% and cooling systems such as CRAC and CRAH units at 3.7%.
At the same time, geopolitical factors, including disruption linked to the Middle East, are impacting logistics. While material and equipment prices remain relatively stable for projects already underway, extended shipping routes around the Cape of Good Hope are increasing transit times and costs.
These pressures are intensifying risk across the data centre construction supply chain. As projects grow in scale and complexity, reliance on a limited pool of specialist contractors and suppliers is increasing. Delays now carry significant financial penalties and reputational risk, reinforcing the need for robust delivery strategies.
Sustainability in data centre design and construction
Sustainability expectations across the data centre sector continue to rise, driven by regulators, investors, and end users. However, adoption remains gradual, with only 41% of respondents reporting implemented sustainability measures.
Reducing carbon emissions and improving energy efficiency are identified as the top priorities in data centre design, cited by 38% of respondents. There is also a growing emphasis on on-site renewable energy generation, with an increase in organisations planning to adopt these solutions compared to the previous year.
For digital construction stakeholders, bridging the gap between sustainability ambition and implementation will require systemic changes in procurement models, design standards, and project delivery methodologies.
Collaboration and industrialised delivery models
Collaboration is emerging as a critical enabler of data centre delivery at scale. The report indicates that 42% of operators have already entered risk-sharing partnerships, while 64% believe that collaboration between developers, OEMs, and energy providers will unlock new energy capacity.
Nikki Venetsanakis, Head of Advanced Tech UK & Europe at RLB, states: “We are at the cusp of a new infrastructure cycle – driven by AI, 5G and 6G and cloud. This new era will see even more growth which could feel intimidating or challenging for developers and operators. Those organisations that will succeed in this new era are those that industrialise delivery – who work with trusted partners to navigate risk and pre-empt challenges ahead, and who are investing in data-driven site selection to reduce power and permitting risk.”
Her comments underline a broader shift towards industrialised construction approaches, where standardisation, digital workflows, and strategic supply chain management play a central role in enabling scalable delivery.
The data centre market is entering sustained expansion, yet delivery capacity, energy strategy, collaboration, and digital construction innovation will determine which organisations successfully scale infrastructure to meet accelerating demand.
To read the full RLB Data Centre Trends Report, click here.
Read next: AI in security: Evaluating accuracy, trust, and operational value – Build in Digital
Are you a building professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.
