2025
Global Data Center Market Report
Regional Market Overviews
Spain
Spain is one of the emerging secondary data center markets in Europe with a total installed capacity of 354.9MW in 2024, benefitting from the current challenges and gradual saturation of the key European markets, FLAP-D (Frankfurt, London, Amsterdam, Paris and Dublin), that drives operators and investors to consider other countries, including Spain, as an alternative for strategic investments. Madrid is the dominant market in the country, accounting for 54.8% of the total installed capacity, largely owing to its strategic location as a pivotal point of data center connectivity infrastructure acting as a link between Europe, Africa and America and being the main telecommunications hub in the Iberian Peninsula (Spain DC, 2025) (Cushman & Wakefield, 2024).
The Spanish Data Center Association projects that Spain could attract direct investments of more than €21.0 Bn ($22.9 Bn) in digital infrastructure investments for the period from 2025 beyond 2027 under the trend market scenario and reach a total installed capacity of 2,180.0MW. While challenges like limited land availability and power delays due to a modified electricity plan have emerged, these issues are expected to ease as data centers receive prioritised access to power under the current regulatory framework (Spain DC, 2025) (Spain DC, 2024).
GDP (Current Prices) USD (2023) | 1,621 Bn |
Projected Average GDP Growth (2024-2028) | 2.0% |
10-year Govt Bond Yield (12-month rolling average) | 3.2% |
Country Credit Rating | A |
Renewable Energy Share | 41% |
Data Center Capacity (Q1 2024) | 355MW |
Note: Renewable Energy Share excludes hydro-power
Market Dynamics and Growth Factors
As of 2024, Spain’s total data center IT power capacity stood at 354.9MW, largely attributable to the increase in data traffic and transactions, digitalization of the economy, prevailing challenges in FLAP-D markets, and the growth of AI adoption, underscored by Microsoft’s planned investment of €2.1 Bn ($2.3 Bn) in AI and cloud infrastructure (Cushman & Wakefield, 2024). However, the market capacity is still relatively smaller than the other FLAP-D markets, e.g., it is just 18.2% of the total capacity of the German market. Nonetheless, the capacity is expected to expand due to the numerous favourable opportunities available in the market (Spain DC, 2025) (German Datacenter Association e.V., 2024).
Spain and other secondary European markets are benefitting from the underlying challenges faced by the core European markets, FLAP-D, due to power constraints and land availability, as well as increasing regulatory scrutiny owing to the growing demand for sustainability in data center operations. Also, as the FLAP-D markets become increasingly more crowded, operators and investors are looking beyond these markets due to cost implications and are expanding in markets such as Spain, which can offer high- speed connectivity, data sovereignty and an alternative for strategic investments as well as business stability and diversification (Cushman & Wakefield, 2024).
Spain, being a critical part of the technological infrastructure network and telecommunication hub within Europe owing to its strategic location, is also playing a prominent role in the growth of the overall data center market in Europe (Cushman & Wakefield, 2024). The DE-CIX Southern European region consists of internet exchanges in Madrid and Barcelona, apart from Lisbon, Palermo, and Marseille, with 13 data centers having almost 500 network connections distributed among them (DE-CIX, 2024). The total customer capacity of these internet exchanges increased 31.0% y-o-y from 2022 and reached 12 terabits in 2023. The peak data throughput of DE-CIX Madrid internet exchange reached 1.5 Tbit/s in 2023, growing at an impressive 44.0% y-o-y as compared to 2022. This increase was driven by rising data traffic and the growing demand for low-latency connections required for real-time decision- making, prompting data center developers to position themselves near the city (DE-CIX, 2024).
Digitalization of the Spanish economy has infused substantial growth in the data center market due to increasing demand from enterprises and government organizations (Cushman & Wakefield, 2024). Spain’s huge investments in the fibre and 5G network, amounting to €4.3 Bn ($4.6 Bn) in public funding and an additional €24.0 Bn ($25.8 Bn) in private funding under its “Plan for Connectivity and Digital Infrastructures and the Strategy to Promote 5G Technology” running from 2020 through 2025, have resulted in the country having ultrafast broadband (European Commission, 2024). As of September 2023, Spain had the highest penetration rate (78.9%) and the second highest coverage rate (91.9%) of Fibre to the Home (FTTH) in Europe (FIERCE Network, 2024) (FTTH Council Europe, 2024)
Spain’s renewable energy capacity and stable economy are key drivers of data center growth, presenting significant opportunities for operators and investors. In 2023, renewable energy accounted for 61.3% of the country’s total electricity generation, making Spain second only to Germany among EU nations (Spain DC, 2025) (Spain DC, 2024). This combination of robust renewable energy resources and economic strength makes Spain an appealing location for sustainable data center development. Major data center operators like Equinix, Interxion, and Amazon Web Services (AWS) have committed to powering their data centers using renewable energy from solar and wind sources. A prime example is Equinix’s energy-efficient BA1 data center located in the city of Barcelona, which is 100.0% powered by renewable energy (Rider Levett Bucknall, 2021) (Equinix, 2024).
Spain’s data center market is dominated by Madrid (194.5MW with 54.8% share as of 2024). As with the other European key data center hubs (FLAP-D) with reference to their respective countries, the city is similarly incredibly significant to Spain in terms of communication, educational institutions and the concentration of businesses, which makes its market very conducive for digital operators and data center industry players contributing to the sector’s growth (Spain DC, 2025) (Spain DC, 2024).
As seen in other sub-markets globally, which have experienced a concentration in data construction activity, Madrid is experiencing a scarcity of land and power availability. The scarcity of suitable land plots with power infrastructure in Madrid has pushed up land prices in 2024, adversely impacting project economics. Consequently, investors are considering other regions such as Barcelona (65.7MW with 18.5% share as of 2024) and Aragon (38.0MW with 10.7% share as of 2024) which have higher land availability and at more economical price points (Colliers, 2024) (Spain DC, 2025).
Barcelona is set to experience sustained investment in the data center market, as highlighted by the various land banking deals. Major real estate developer Panattoni and build- to-suit data center developer Global Technical Realty (GTR) have been acquiring large swathes of land for data center development. GTR’s site spans 15,000 sqm and can host a new 16.0MW IT load facility. Panattoni has acquired a 60,000 sqm plot of land and aims to develop a 42.0MW two-building campus. Panattoni is reportedly aiming to invest around €300 Mn ($328 Mn) in the project (Global Technical Realty, 2023) (Colliers, 2024) (Data Center Dynamics, 2023).
Aragon is expected to receive a significant share of the big-ticket investments planned by large cloud players such as AWS and Microsoft, which have announced investments of €15.7 Bn ($16.9 Bn) and €6.7 Bn ($7.2 Bn), respectively, over the next 10 years, to expand their cloud regions and build new data centers in the region. The biggest advantages offered by the region are land availability, access to renewable sources, exceptional connectivity and seamless collaboration with the local authorities, which make it an extremely attractive option for building and operating data centers (Colliers, 2024) (DC Byte, 2023).
Other locations that are witnessing investments and capacity building are Valencia, Malaga, Castilla-La Mancha, Galicia and the Bilbao- Navarre corridor. Availability of large land plots, secure power supply, access to renewable energy and excellent connectivity due to the arrival of submarine cables, are some of the key factors driving data center investments in these regions (Colliers, 2024) (Spain DC, 2024).
Spain’s hyperscale market is dominated by global technology majors such as Google, Oracle, AWS, and IBM, which have launched multiple cloud regions in the country over the past couple of years. Microsoft is also investing heavily in the Spanish market as a business diversification strategy to expand beyond the FLAP-D markets (Arizton Advisory and Intelligence, 2024) (DC Byte, 2023) (Cushman & Wakefield, 2024) (Data Center Dynamics, 2022) (Oracle, 2022) (AWS, 2022) (Data Center Dynamics, 2023).
The Spanish colocation market is highly competitive, driven by strong demand for digital infrastructure and cloud services. Spain’s strategic position as a digital gateway between Europe, Latin America, and North Africa, combined with its growing digital economy, makes it an attractive location for colocation services. Major players like Equinix, Interxion, Digital Realty, NTT, and Global Switch are actively expanding their facilities in Spain, particularly in Madrid and Barcelona, to meet the rising demand for data storage and cloud services (Colliers, 2024) (Cushman & Wakefield, 2024).
Policy Regulation
After the adoption of the EU-wide revised Energy Efficiency Directive (EED), effective from September 2024, which set a binding target of reducing energy consumption by 11.7% by 2030, it is expected that innovations and investments in green data center technologies are going to see a boost across the region (EUR-Lex, 2023) (Spain DC, 2025). Spain proactively adopted policies in this regard to be aligned with the European guidelines. The Royal Decree-Law, 8/2023 of 27 December 2023 (“Royal Decree- Law 8/2023”), among other provisions, outlines measures to promote energy savings and efficiency in data centers.
Data centers are now mandated to offer financial guarantees for electricity grid access, fostering improved energy efficiency. It also promotes competitive bidding for access to grid nodes, prioritizing projects with high energy efficiency and low carbon emissions (Freshfields Bruckhaus Deringer, 2024) (Garrigues, 2023). However, data center investors view the financial guarantee provision as restrictive, particularly in the Madrid market, where most power grid access requests pertaining to planned data centers potentially constrain growth. Any adverse effects on the Madrid data center market could also impact other regions and the overall market in Spain (Bird & Bird, 2024) (Freshfields Bruckhaus Deringer, 2024) (Bloomberg, 2024) (Spain DC, 2024).
This regulation comes in the backdrop of The Ministry for Digital Transformation and Public Administration working on a modified electricity plan for 2025-2030 because the energy demand, as estimated in the current five-year plan covering 2021-2026, has fallen way short of the actual demand. This is due to the higher- than-expected demand generated by the data centers, which was grossly underestimated in the previous plan. Most data center players feel these actions are insufficient and expect swifter reactions from the authorities and the sole transmission system operator (TSO), Red Electrica, so that it does not cause massive disruptions to the growth of the data center market, signs of which are already visible. The saturation in certain pockets of Madrid in terms of power availability has resulted in the cancellation of some projects due to high costs (Freshfields Bruckhaus Deringer, 2024).
From the Spanish Data Center Association’s viewpoint, the country’s regulatory framework is ambiguous, and there may be a tendency for hyperregulation that can result in the market losing its competitive advantage to the other European markets, resulting in data center development failing to achieve its true growth potential. Moreover, a convoluted permitting process requiring regulatory compliance at municipal, regional and federal levels can extend project timelines and stymie the growth momentum in data center development (Spain DC, 2025) (Spain DC, 2024).
Outlook
Revenue from the Spanish data center market is projected to grow at a CAGR of 6.1% during 2024-2029 and reach a value of $6.0 Bn by 2029 from $4.5 Bn in 2024, largely driven by the growing demand for higher processing capacity requirements triggered by the emergence, development, and use of AI tools (Spain DC, 2025) (Spain DC, 2024) (Statista, 2024). The Spanish Data Center Association estimates, by assessing various market scenarios, that the capacity in Madrid will reach anywhere between 365.0MW to 920.0MW by 2027 as compared to 194.5MW in 2024, growing at a CAGR between 23.4% to 67.9%. While Spain’s installed capacity is expected to grow from 354.9MW in 2024 to between 860.0MW and 1,552.0MW over the same period, with a CAGR ranging from 34.3% to 63.5%. This is based on the substantial pipeline of investments announced by large public cloud service providers, concentrating on the demand for colocation services in the market (Colliers, 2024) (Spain DC, 2025).
The strong market growth outlook, as visible in the investment commitments and an expanding project pipeline, is sustained by a general preference for Spain among the secondary European markets beyond the increasingly saturated FLAP-D markets. Spain’s strong digital infrastructure and high-speed connectivity give it an edge over competing countries. Initiatives like the 2025 Digital Spain Plan significantly support the data center sector, with substantial investments aimed at enhancing digital infrastructure. The country plans to invest €28.3 Bn ($30.4 Bn) from 2020 to 2025, demonstrating its commitment to digital transformation and expansion. The Spanish Data Protection Act (LOPD), which is aligned to the EU-wide General Data Protection Regulation (GDPR), establishes the country’s credibility to handle bulk data processing with the utmost security and is imperative for the growth of the data centers (Centraleyes, 2024) (European Commission, 2024).
Source: Statista
Forward and Backward integration in the data center market is also going to drive investments in the sector. Leveraging the expansion of data centers in Spain, energy companies like Iberdola and Solaria have started developing their own data center portfolios to leverage their existing energy resources and expertise. At the same time, data center developers are also investing in renewable energy projects to secure power supply and add to their credibility as a sustainability-focused market player (The Corner, 2024) (Solaria, 2024) (Invest in Spain, 2024).
Overall, Spain has several factors going in its favour of being a preferred destination among the secondary emerging markets in Europe, notwithstanding the temporary headwinds posed by regulations and resource constraints. While this may cause developers to explore alternative locations in the short term, the strong market fundamentals will enable the region to sustain its growth trajectory over time.