Global Data Center Trends 2026

North America

North American inventory across the four largest data center markets—Northern Virginia, Atlanta, Dallas-Ft. Worth and Chicago—increased by 33% year-over-year in Q1. This is slower growth than in the year ended Q1 2025, when inventory rose by 43%. Dallas-Ft. Worth jumped two spots to become the region’s third-largest market in Q1, posting the second-largest inventory gain of 379.9 megawatts (MW) or 43.7%, driven by demand from hyperscalers, AI startups and enterprises. Chicago replaced Phoenix to rank fourth. Northern Virginia remained the largest global market, adding 1,135.9 MW (37.3%).

Europe

Inventory across Europe's four largest markets—London, Frankfurt, Paris and Amsterdam—rose by 18.9% year-over-year in Q1, up from 7.2% in the year ended Q1 2025. London remained the largest market in Europe, followed closely by Frankfurt. Both added record levels of new inventory in the past year, underscoring their appeal to operators and tenants as desirable markets for data center development. Paris remained the third-largest data center market in Europe, followed by the slower-growing Amsterdam.

Asia-Pacific

Asia-Pacific inventory increased by 13.4% year-over-year in Q1 across Singapore, Tokyo, Hong Kong and Sydney. Sustained hyperscale and AI demand supported the region's growth, even as power availability, elevated construction costs and regulatory complexity continued to extend development timelines in core hubs. As a result, neocloud providers have emerged as a prominent demand source across primary and secondary markets, scaling rapidly to support high-performance computing workloads.

Latin America

Inventory across the four largest Latin American data center markets—São Paulo, Querétaro, Santiago and Bogotá—jumped by 41.3% year-over-year in Q1 to 1,045.0 MW. Querétaro had the largest increase, surging by 450.2% due to hyperscale and AI deployments. São Paulo remained the largest market in the region with 536.7 MW, followed by Querétaro (298.2 MW), Santiago (165.8 MW) and Bogotá (44.3 MW).

Figure 2: Data Center Inventory by Market

North America

North American data center vacancy for the top four U.S. data center markets fell to an all-time low in Q1, despite a 33% year-over-year inventory increase. Northern Virginia remained the tightest market, with vacancy declining to 0.3% in Q1 from 0.8% a year ago. Atlanta posted the steepest vacancy rate reduction to 1% from 3.6%, as robust leasing activity continued to reduce availability. Chicago's vacancy rate dropped to 2.2% from 3.1%, while Dallas-Ft. Worth fell to a record-low 1.8% from 2.4%.

Europe

The overall European data center vacancy rate remained at 7.3% year-over-year in Q1, as demand growth outpaced new supply. However, vacancy rates varied by market. Frankfurt had the region’s lowest vacancy rate, unchanged year-over-year at 5%, while London’s increased to 8.6% in Q1 from 8% a year ago. Paris' traditionally high vacancy rate declined the most to 6.7% from 7.7%, while Amsterdam fell slightly to 9.4% from 9.7%.

Asia-Pacific

Asia-Pacific's overall vacancy rate remained at 7% in Q1, indicating strong underlying demand amid new supply deliveries. Singapore maintained the region's lowest vacancy rate at 2% due to limited greenfield supply opportunities in the pipeline, followed by Sydney at 4.5% and Tokyo at 6%. Hong Kong had the highest vacancy rate at 18%, down significantly from 28% in Q1 2025 due to robust leasing velocity.

Latin America

Vacancy rates across the four major Latin American markets were mixed. Santiago held the lowest vacancy rate at 3.3% in Q1, followed by São Paulo at 9.6%. Querétaro's vacancy increased to 10.6% from 0.9% a year earlier, as new hyperscale supply outpaced absorption. Bogotá maintained the highest vacancy rate at 18.7%, down from 21.2%. The pace of absorption and vacancy compression varied significantly across markets.

Figure 3: Data Center Vacancy Rate by Market

North America

Net absorption in the top four North American markets surged by 34% year-over-year in Q1 to 2,236.2 MW, driven by record leasing activity in Northern Virginia and outsized demand in Dallas-Ft. Worth. Northern Virginia set a new all-time high for absorption at 1,148.3 MW, as hyperscalers continued to expand their footprints and AI startups—including neoclouds—sought large amounts of available continuous power.

Europe

Net absorption across the four key European markets increased by 90% year-over-year in Q1 to 572.1 MW, primarily in Frankfurt and London. The return of hyperscaler demand and new AI demand led by neoclouds drove net absorption to 218.1 MW in Frankfurt and 208.4 MW in London.

Asia-Pacific

Net absorption increased across all four major Asia-Pacific markets to 608.9 MW in Q1, just ahead of Europe. Demand was most pronounced in Sydney and Tokyo, reflected in both markets' year-over-year vacancy declines. Hong Kong and Singapore had modest absorption gains, constrained by limited available capacity.

Latin America

Overall net absorption across Latin America's primary markets was 270.7 MW in Q1, with activity concentrated in two markets. Querétaro led the region with 213.0 MW due to hyperscale demand, followed by São Paulo (39.2 MW), Santiago (17.4 MW) and Bogotá (1.1 MW).

Figure 4: Data Center Net Absorption by Market, Q1 2025 to Q1 2026

North America

Data center pricing continued to increase across North America in Q1, but at a more moderate rate than last year. Chicago had the highest rental rates, ranging from $200 to $230 per kW/month for a 250-to-500-kW requirement, followed by Northern Virginia with a broader price range of $190 to $235. Across the top four markets, aggregate average asking rents grew by single digits year-over-year. Chicago had the highest increase of 14.7% and Atlanta rose by 2%, while Dallas-Ft. Worth asking rents were unchanged. Throttled construction timelines will limit U.S. data center supply through 2030, driving pricing to unprecedented highs.

Europe

Rental rates across Europe's four major markets increased year-over-year in Q1, ranging from $165 to $265 per kW/month for a 250-to-500-kW requirement. Limited supply, increasing demand and higher build costs drove the overall increase, though pricing is highly location-specific. For example, providers can charge a premium price for capacity in parts of West London near cloud availability zones since wholesale inventory is limited. Rental rates can be lower in regions further from hyperscaler availability zones, but the price gap is narrowing as new supply is absorbed. Frankfurt had the highest rental rates, ranging from $235 to $265 per kW/month, due to limited available inventory.

Asia-Pacific

Asia-Pacific pricing remained stable across major markets in Q1. Singapore had the highest asking rents at an average of $403 per kW/month, followed by Tokyo at $280 and Sydney at $188. Hong Kong rose to $295 in Q1 from $270 a year ago, due to declining supply and strong preleasing demand.

Latin America

Latin American rental rates remained stable in Q1 amid increased operator competition. São Paulo offered the most competitive pricing at $130 to $190 per kW/month. Querétaro rents ranged from $250 to $270, Santiago from $190 to $210 and Bogotá from $150 to $230.

Figure 5: Monthly Pricing for 250-to-500-kW Capacity by Market

North America

Overall availability across the top four North American markets declined to an all-time low due to power procurement constraints. Dallas-Ft. Worth's available supply rose by a modest 1.4 MW year-over-year in Q1, despite an inventory increase of 379.9 MW in that same period. Availability declined in Chicago and Northern Virginia to 19.8 MW and 10.8 MW, respectively. Atlanta had the largest decrease in availability, falling to 14.5 MW in Q1 from 45.7 MW a year ago.

Europe

Overall availability increased slightly year-over-year in Q1 across three of Europe's main markets. London had the largest increase in availability at 26.5 MW, followed by Frankfurt (10.3 MW) and Amsterdam (3.9 MW). Paris' traditionally high availability remained flat at 44.8 MW, as wholesale demand absorbed added inventory.

Asia-Pacific

Availability across all major Asia-Pacific markets fell by 43% year-over-year in Q1. Tokyo's availability is concentrated in suburban clusters with newer wholesale colocation facilities. Singapore's available space ticked up slightly but remained fragmented, making it difficult to accommodate single, large-scale deployments. Sydney and Hong Kong maintained moderate availability, with new space absorbed aggressively amid stable preleasing momentum.

Latin America

Available capacity across major Latin American markets continued to decline but varied by location, driven by power and infrastructure constraints. Querétaro availability surged to 31.5 MW in Q1 supported by recent capacity additions, while Santiago remained limited at 5.4 MW due to extensive preleasing. São Paulo's available capacity rose slightly to 51.5 MW as absorption accelerated, and Bogotá fell to 8.3 MW due to its smaller scale and earlier-stage demand. Overall availability is expected to continue tightening through 2026, reinforcing the need for proactive power procurement.

Figure 6: Data Center Availability by Market

Northern Virginia

Northern Virginia's wholesale data center inventory rose by 1,135.9 MW year-over-year in Q1 to 4,182.0 MW. Strong leasing activity persisted despite ongoing power supply challenges, driving net absorption of 1,148.3 MW—the greatest absorption increase of any market since CBRE's first global data center report in 2023. The market's overall vacancy rate fell to an all-time low of 0.3%, while average rental rates continued to rise amid robust demand.

Opportunities

• Dominion Energy's transmission upgrades continue to support record-high absorption and delivery levels.
• Strong demand continues to drive record-low vacancy, while developers increasingly evaluate opportunities down I-95 and toward Richmond.

Challenges

• Zoning and entitlement challenges are limiting the market's ability to expand and capture robust demand, especially in highly concentrated areas like Loudoun and Prince William Counties.
• The limited availability of sites exceeding 100 continuous acres is pushing developers of large projects to other locations in Virginia and adjacent PJM markets.

Dallas-Ft. Worth

Dallas-Ft. Worth (DFW) became the nation's third-largest colocation market, increasing its inventory by 44% year-over-year in Q1 to 1,249.4 MW. The market's record-high 716.7 MW of data center space under construction was 88% preleased, and limited supply is driving up rental rates across all requirement sizes. Hyperscale and AI companies' continued interest is further fueling market growth.

Opportunities

• Development continues in the DFW area as Oncor Electric conducts data center load cluster studies to determine a path toward grid interconnection.
• Developers are increasingly considering projects further south on I-35 due to fiber connectivity advancements in the area.

Challenges

• Power timelines for grid interconnection have not materially improved in the past six to 12 months.
• DFW's extended rezoning and entitlement timelines are a key consideration for site selectors deciding between DFW and West Texas.

Chicago

Chicago's wholesale data center inventory increased by 37.7% (249.2 MW) year-over-year in Q1 to 910.6 MW. Available inventory and the overall vacancy rate declined to 19.8 MW and 2.2%, respectively, due to strong demand from hyperscale, AI, enterprise and financial services companies. Robust demand also drove a year-over-year increase in average rents.

Opportunities

• Development continues to expand westward into power-accessible submarkets like Elk Grove, Northlake and Hoffman Estates, supported by advancements in fiber connectivity.
• Strong AI-driven demand and preleasing momentum are attracting further investment and supporting market growth.

Challenges

• ComEd power-delivery timelines remain extended into 2032 or later, requiring significant financial commitments and constraining near-term development.
• Zoning, entitlements and local community considerations around energy use are stretching project timelines and influencing site-selection decisions across the metro.

Atlanta

Atlanta has cemented its status as one of the nation's leading colocation markets, as inventory increased by 14.5% year-over-year in Q1 to 1,465.2 MW. Available inventory and the vacancy rate fell to 14.5 MW and 1%, respectively, due to robust leasing activity from hyperscale and AI companies. Limited supply is driving rental rates up across all requirement sizes.

Opportunities

• Georgia Power's approvals for substantial new generation capacity support long-term power availability and position Atlanta for continued large-scale expansion.
• The market's strategic location, abundant fiber routes and land availability in the southern suburbs make it an attractive alternative to East Coast markets.

Challenges

• Georgia Power's bid to protect existing ratepayers by imposing stricter rules and financial guarantees for large-load customers is extending development timelines.
• Evolving regulatory scrutiny around tax incentives and rapid grid expansion is making it difficult for some operators to plan.

London

Although London is still the largest European market, Frankfurt outpaced it in year-over-year inventory growth in Q1. Over the same period, London's inventory growth of 21% drove the market's overall vacancy rate up by 60 basis points to 8.6%, even as net absorption increased. Rental rates remain stable, although there is some upward pressure as new inventory is absorbed. Data center construction costs are expected to continue rising due to supply chain challenges and liquid cooling infrastructure requirements.

Opportunities

• Inventory is growing in markets adjacent to existing cloud availability zones, like the north of London, where powered land is more widely available.
• Limited availability in London is pushing neoclouds to retrofit older data centers to meet high-density infrastructure demands.

Challenges

• Power availability in the London area remains a key constraint. The West London corridor is unlikely to receive a key substation upgrade until the early 2030s.
• The high cost of energy in the UK limits compute demand, as other European destinations (including France and Spain) have considerably lower power costs.

Frankfurt

Frankfurt maintained its position as the second-largest data center market in Europe. The market's inventory increased by 23% year-over-year in Q1 to 1,222.5 MW, while the vacancy rate remained at 5%. As demand continues to outstrip supply, rental rates are increasing, particularly in central Frankfurt.

Opportunities

• New data center projects continue to be planned farther from the immediate city, stretching the development boundary toward regions 40 kilometers away.
• The Frankfurt ecosystem continues to attract hyperscaler investment, including sovereign cloud and select AI providers.

Challenges

• Grid capacity in the Frankfurt data center central area remains constrained, with upgrades unlikely until the 2030s.
• Some municipalities are restricting data center development through rezoning initiatives due to environmental concerns, which is extending project timelines and adding to investment uncertainty.

Paris

Paris reinforced its position as the third-largest European market, increasing its inventory by nearly 15% (85.0 MW) year-over-year in Q1 to 666.8 MW. More significantly, the overall vacancy rate fell to 6.7% in Q1 from 7.7% a year ago, as net absorption kept pace with the additional supply.

Opportunities

• Paris has benefited from strong hyperscaler and AI demand. Neoclouds and sovereign AI providers, such as Mistral AI, have emerged as significant demand drivers.
• New developments are continuing south of Paris—where former industrial land offers more power availability—and have recently expanded to the north of the city.

Challenges

• In Paris, environmental assessment and permitting for data centers involves multiple layers of government—particularly when a change of use is needed—which can lead to long development cycles.
• Developers are planning projects in areas of France with easier access to high-voltage power.

Amsterdam

Amsterdam remained Europe's fourth-largest data center market ahead of Dublin, increasing inventory by just over 11% (64.3 MW) year-over-year in Q1. This was the smallest increase of the four main European markets. Power constraints in much of Amsterdam's central area and a recent moratorium on projects over 70 MW will continue to limit new development.

Opportunities

• Select data center operators like Pure DC have obtained planning approval for new projects by reusing previously approved proposals.
• New substation capacity is becoming available in parts of Amsterdam's Schiphol-Rijk area, allowing new wholesale supply to be brought to market after years of delay.

Challenges

• The moratorium on new projects above 70 MW has constrained Amsterdam's ability to accommodate large AI and neocloud requirements.
• Developers are looking outside of Amsterdam for their projects, with plans for large campuses in Rotterdam and in the north of the Netherlands. In the future, large wholesale requirements may go to other countries with easier permitting.

Singapore

Singapore continues to attract strong demand for colocation deployments, underpinned by hyperscale growth, enterprise digitalization and rising AI workloads. New supply is tightly controlled under governmental sustainability and energy efficiency requirements, maintaining the vacancy rate at a structurally low 2%. The launch of the second Data Centre Call for Application (DC-CFA2) is expected to release more than 200 MW of capacity. However, stringent qualification criteria limit the pool of eligible operators, constraining new wholesale and retail supply.

Opportunities

• Singapore offers political stability, a business-friendly environment and robust infrastructure and connectivity. The DC-CFA2 framework reinforces the city-state's long-term strategy of favoring AI-ready, low-carbon facilities.
• AI-readiness of existing stock is a growing concern, as many legacy facilities were not designed for modern workloads. This deficiency creates opportunities for energy optimization and sustainability upgrades.

Challenges

• New development is heavily controlled geographically, making it increasingly difficult for operators to develop outside designated areas.
• Power availability remains the principal development bottleneck, with inventory expected to remain limited through 2026.

Tokyo

Tokyo remains one of Asia-Pacific's most important data center markets. Inventory exceeded 1 GW of capacity in Q1 due to sustained demand from hyperscale cloud providers and accelerating AI deployments. Enterprise colocation demand has remained stable, driven by the ongoing digital transformation across Japan's key sectors. Overall market vacancy declined to 6% in Q1, despite the capacity added in the past 12 months.

Opportunities

• Domestic corporates, particularly semiconductor manufacturers, are driving colocation demand to support GPU-based chip design and AI-computing workloads.
• Leasing fundamentals are strengthening, as operators explore suburban clusters to develop larger, next-generation wholesale colocation and hyperscale facilities.

Challenges

• Power constraints continue to limit new supply, particularly in Greater Tokyo, as developers plan large-scale projects to accommodate AI workloads.
• Demand is rising for high-performance, onsite energy infrastructure, such as gas cogeneration solutions for power resilience. Securing strategic infrastructure partnerships will be critical to managing development timelines.

Hong Kong

Hong Kong's data center market is transitioning into a high-density hub for AI inference and hybrid cloud providers. The city's subsea cable density and the dual-jurisdiction status of the Greater Bay Area make it a critical gateway for low-latency financial services and cross-border data flows. Land scarcity and five-year power allocation lead times favor established vertical campuses in Tseung Kwan O, driving sustained demand and a decline in the market’s vacancy rate in Q1.

Opportunities

• The city's position as a node for cross-border data flows ensures a steady stream of preleasing, driven by hyperscale cloud providers, mainland Chinese technology firms and financial institutions.
• The near-term supply pipeline is concentrated in Kwai Chung and Tseung Kwan O. The Sandy Ridge Data Facility Cluster in the Northern Metropolis—scheduled to come online in 2029—will lead longer-term supply.

Challenges

• Hong Kong's ability to capture AI-driven demand is limited, as most existing data centers are designed for 5 to 15 kW per rack and are insufficient for the 40-kW-plus densities required by AI workloads.
• High land costs, limited power and self-build challenges for hyperscalers continue to constrain large-scale development.

Sydney

Sydney's data center market attracted significant investment in the past year, reinforcing its role as a key hub in the Asia-Pacific region. Its stable political climate, advanced infrastructure and strong connectivity garner domestic and regional deployments.  As a result, the market's vacancy rate declined to 4.5% in Q1 and rental rates held firm despite a steady pipeline of new supply.

Opportunities

• AI-related demand—particularly for high-powered GPU deployments—is driving leasing velocity, while traditional enterprise demand remains steady. Neocloud operators are taking large blocks of capacity to support hyperscaler and AI workloads.
• Deal sizes are increasing significantly, with occupiers seeking campus-scale commitments and larger-scale data centers.

Challenges

• Power procurement timelines and planning approvals are constraining new development. For example, the Australian Energy Market Commission recently proposed new technical standards for large data centers connecting to the National Electricity Market.
• Construction cost pressures have stabilized, but supply chain bottlenecks for transformers and switchgear continue to extend construction completion timelines.

São Paulo

São Paulo is the largest and most established data center market in Latin America. Total wholesale inventory increased by 8.9% year-over-year in Q1 to 536.7 MW. The market absorbed approximately 39.2 MW in that same period, driven by hyperscale cloud providers scaling their footprints in Brazil. Available supply reached 51.5 MW, with an overall vacancy rate of 9.6% amid balanced supply and demand. São Paulo's role as Brazil's economic capital, combined with established fiber and submarine cable access, ensures its continued dominance.

Opportunities

• Ongoing subsea cable investments connecting Brazil to North America, Europe and Africa reinforce São Paulo's role as Latin America's primary connectivity hub and support hyperscale expansion.
• Growing AI and cloud adoption across Brazil's private and public sectors is generating sustained demand, with multi-megawatt requirements increasingly common.
• Fiscal incentive legislation for data centers is advancing through Brazil's regulatory framework, and tax benefits are expected in the near term.

Challenges

• Power procurement complexity and grid reliability concerns in certain submarkets continue to create uncertainty for large-scale deployments.
• Currency volatility and macroeconomic uncertainty are creating pricing and contract risks for international operators.

Querétaro, Mexico

Querétaro has emerged as the fastest-growing data center market in Latin America. Inventory surged by 450.2% year-over-year in Q1 to 298.2 MW, driven by a small number of large-scale hyperscale and AI deployments that have rapidly reshaped installed capacity. The market's available supply jumped to 31.5 MW and its overall vacancy rate was 10.6%, indicating significant preleasing. The market benefits from its location within Mexico's primary industrial hub and proximity to key fiber routes connecting to North America.

Opportunities

• Querétaro is well positioned to benefit from Mexico's nearshoring boom, as manufacturing and logistics companies and enterprises relocating from Asia generate demand for digital infrastructure.
• The region's proximity to the U.S. and its integration into North American supply chains reinforce Querétaro's status as a gateway for regional cloud deployments.

Challenges

• Power grid capacity constraints continue to limit expansion. Developers are increasingly required to self-generate power or coordinate with local utilities, adding cost and execution risk.
• Rapid market growth has strained local skilled labor availability, intensifying competition for technical talent and potentially extending construction timelines.

Santiago

Santiago's data center market has steadily expanded, with total inventory rising by 12% year-over-year in Q1 to 165.8 MW. Available supply remained at 5.4 MW in that same period, reflecting high utilization and restricted near-term capacity.

Opportunities

• Santiago's expanding connectivity profile—supported by submarine cable investments linking Chile to North America, Asia and Australia—has garnered interest from content delivery platforms and cloud providers seeking low-latency access to the Pacific Rim.
• Chile's stable regulatory framework, legal certainty and investor-friendly policies continue to attract digital infrastructure investment, supporting long-term demand for cloud and regional digital services.

Challenges

• Water availability considerations in Greater Santiago have led to increased regulatory oversight on cooling water usage, requiring greater investment in more efficient cooling solutions.
• The moderate scale of Chile's domestic economy limits demand growth from local enterprise users, reinforcing Santiago's reliance on regional and international hyperscale deployments.

Bogotá

Bogotá's data center market conditions changed little in the past year. Inventory remained at 44.3 MW in Q1, with 36.0 MW occupied and 8.3 MW available, resulting in a vacancy rate of 18.7%. Net absorption of 1.1 MW reflects subdued leasing momentum, driven by domestic enterprise demand rather than hyperscale activity. Colombia's digitalization initiatives are expected to support the market in the long term, though growth remains constrained by an early-stage hyperscale pipeline.

Opportunities

• Colombia's free trade agreements and macroeconomic stability may support incremental interest from international technology firms, though near-term demand remains modest and enterprise-led.
• Ongoing investments in national fiber infrastructure and connectivity to submarine cable landing points support Bogotá's long-term potential as an interconnection market.

Challenges

• Power infrastructure reliability and the cost of achieving Tier III redundancy continue to require significant investment in backup generation.
• Bogotá’s market depth remains limited relative to mature Latin American hubs, as a result of its emerging hyperscale pipeline and reliance on a small number of anchor tenants for large-scale absorption.