Europe’s data centre market has transformed during the past 12 months

Europe’s data centre market is rapidly evolving into one of the most dynamic areas of real estate investment, shaped by digital transformation, geopolitical pressures and shifting stakeholder expectations, according to Thomas Veith, global real estate leader at PwC.

Speaking at Mipim 2026 in Cannes in an interview with Richard Betts, group publisher of Real Asset Media, Veith said the sector has emerged as a clear focal point for investors seeking long-term structural growth.

“People are looking for what the opportunities are. And as we have seen from our roundtable, data centres are of course the hottest thing, it seems,” he said.

He linked the surge in interest to a broader transformation of the digital economy, with demand for infrastructure accelerating across Europe.

Alongside this, geopolitical tensions are increasingly shaping investment decisions, particularly around data sovereignty.

“One important topic that’s coming on top, driven by the geopolitics, that’s about sovereignty in Europe… we [will] need more local infrastructure here in Europe,” Veith said, adding that this is reinforcing demand beyond pure digitisation trends.

While data centres have become a top investment class over the past three to four years, Veith stressed that the European market differs structurally from the US. Rather than being dominated by hyperscale developments, Europe is seeing a more diverse and fragmented landscape.

“The range of data centre that we are seeing is really multiplying. It’s not just a hyperscaler… Europe is not such a hyperscaler market,” he said.

Instead, growth is being driven by a mix of cloud providers entering the market, as well as facilities designed specifically for AI-led workloads. Co-location assets remain central, but the range of developments is broadening as demand diversifies.

Sustainability considerations are also reshaping how and where data centres are built. Veith noted a clear shift away from large greenfield developments towards repurposing existing assets.

“It’s less building the big 100 megawatt sites on green areas. It’s more the alternative use of current existing brownfield assets… like old office buildings,” he said.

This approach reflects both environmental pressures and constraints around energy availability, which remain critical to development decisions.

At the same time, the stakeholder landscape is becoming more complex. Governments, municipalities and local communities are taking a more active role in shaping data centre deployment, often weighing economic benefits against competing land uses.

“It’s more, also, the society and the governments that are looking at this… every city is thinking about… what do I get out of the tax? How many jobs does this create?” Veith said.

He warned that in some markets, this is leading to increasing resistance, with certain cities pushing back against further data centre expansion.

“We see in some parts of Europe that this is a high competition where a lot of cities say, ‘no, we don’t want more data centres currently’. And that’s a bad trend,” he added.

As a result, Veith emphasised that successful development will depend not only on securing power and connectivity, but also on managing a broader set of stakeholders.

“The stakeholder management has to be widened… we have to also take care of the public, the governments, the local cities that want to have their stake out of the data centre transformation,” he said.

The sector’s rapid evolution since Mipim 2025 highlights how quickly data centres have moved to the centre of Europe’s real estate investment narrative, with growth prospects remaining strong but increasingly complex to navigate.