JLL - Global Data Centers Outlook 2023

The 2023 Global Data Center Outlook report provides valuable insights into the rapidly expanding data needs and investor interest in the data center industry. The report highlights that sustainability and energy efficiency are top priorities for data center users, operators, and investors. Legislation and self-regulatory initiatives are driving efforts to improve the industry's climate impact. The fastest-growing segments in the data center space are hyperscalers and edge data centers. Hyperscalers cater to increasing demand, while edge data centers allow for diversification and improved latency. The rise of artificial intelligence (AI) will drive increased data usage and improve computing efficiency, further bolstering demand for data centers. Despite capital market pricing challenges, data centers still attract high interest from investors. Development plays in key markets, especially value-add opportunities like redevelopments, offer potential for investment. Power constraints in hub markets like Amsterdam and Loudon County are driving growth into secondary markets such as Atlanta, Berlin, and Chennai. The proliferation of mobile devices and the Internet of Things (IoT) has pushed applications closer to the end user and the edge, driving growth in secondary and frontier markets. The size of data centers is influenced by their proximity to core regional hubs. Data centers closer to the core hubs tend to be larger, while those further away at the edge are smaller. The report also highlights challenges in the data center industry, including supply chain limitations and skills shortages. Overall, the report provides a comprehensive outlook on the global dynamics and outlook for the data center industry in 2023 and beyond.