North America sees 70% jump in data centre supply in construction

North America sees 70% jump in data centre supply in construction is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• North America’s data centres construction in leading markets has seen a 70% increase, reaching an unprecedented 3.9 gigawatts.
• This expansion is not only reshaping the landscape of the tech industry but also influencing the economic prospects of various regions across the continent.

OUR TAKE
The construction and development of data centres, as key infrastructure supporting modern information technology, is of great interest to the industry. A recent study released by CBRE Group reveals the latest developments in data centre construction in North America, showing significant growth in the supply of data centre construction in the region. This phenomenon not only reflects the fierce competition among technology giants in the field of artificial intelligence and cloud computing, but also maps out the demand trends and future development direction of the global data centre market.
–Elodie Qian, BTW reporter

What happened

North American Data Centre Construction Surges by 70%, CBRE Reveals

The construction of data centres in North America’s leading markets has seen a remarkable 70% increase, reaching an unprecedented 3.9 gigawatts, as reported by CBRE Group on Tuesday.

Data centres, often likened to colossal computer warehouses, are more accurately gauged by the power consumption they incur.

In the ongoing race among the world’s leading tech firms to expand in artificial intelligence and cloud computing sectors, the demand for power from data centres has skyrocketed.

During the first half of 2024, over 500 megawatts of new data centres were introduced in the eight largest markets across the United States and Canada, a capacity that matches the entirety of Silicon Valley’s existing infrastructure, according to CBRE.

The report highlights that the inventory of new data centres expanded by 10% in the first six months of the year, marking a 23% increase from the previous year.

The key North American data centre markets include Northern Virginia, Dallas and Fort Worth in Texas, Silicon Valley in central California, Chicago, Phoenix in Arizona, the New York Tri-State Area, Atlanta, and Hillsboro in Oregon.

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Why it’s important

This surge in new inventory has led to a significant drop in data centre vacancy rates, which have hit a record low of 2.8%, as stated by CBRE. The pricing of these centres has also seen an uptick, with newer facilities typically commanding a higher premium over their older counterparts.

The CBRE Data Centre Trend Report explains, “The demand for high-powered computing has led to a pronounced disparity in pricing between legacy facilities and new data centres, primarily due to the outdated infrastructure of older centres being unable to meet the power requirements of contemporary users.”

The report further suggests that the heightened demand for state-of-the-art facilities could render smaller markets, such as Northern Indiana, Idaho, Arkansas, and Kansas, increasingly attractive.

The data centre sector in North America is experiencing a period of significant growth and transformation, driven by the insatiable appetite for power and advanced computing capabilities of today’s technology giants.

This expansion is not only reshaping the landscape of the tech industry but also influencing the economic prospects of various regions across the continent.