Under challenging conditions, stable networks, powerful cloud solutions and a reliable digital infrastructure are making their mark as the backbone of economic and social life in Germany during the COVID 19 pandemic. And yet there have been only a few studies with reliable data on the data center industry.
The Data Center Outlook 2021 – a joint venture of the auditing and consultancy company PwC Germany and the GERMAN DATACENTER ASSOCIATION – now creates more transparency in this dynamic and rapidly growing industry.
"We are pleased that the Data Center Outlook 2021 has succeeded in illuminating the topic of data centers holistically in all its facets for once - whether as an asset class for the real estate market, a hub and marketplace for the growing Internet economy, or as an important building block in relation to the challenges of the energy transition in Germany."
Jens Peter Müller
Second chairman of the GERMAN DATACENTER ASSOCIATION
German cities top locations for data centers
The decisive criterion for the attractiveness of data center locations is their proximity to relevant Internet hubs. Frankfurt - home of DE-CIX - takes the top spot in the ranking of the most attractive locations in the DACH region, followed by Munich and Berlin. Vienna, Hamburg and Zurich rank 4th to 6th.
DE-CIX is the dominant Internet exchange (IXP) in Germany with over 50%. The following IXPs play a far less significant, more regional role.
Edge on the advance
Nevertheless, the importance of edge locations, i.e., data centers located close to the source of latency-sensitive data, is growing: half of the data centers already have a corresponding offering or are planning to enter this segment. Edge offerings are not yet standardized, but with increasing Industry 4.0 requirements, they are certainly on the growth path.
Potential in sustainability and energy efficiency
Data centers can make a significant contribution to meeting the challenges of the energy transition. The study shows great potential in the area of waste heat utilization: the majority of operators (82 percent) stated that they do not use the waste heat generated during data center operation, or use it only to a limited extent. Only around one in ten data centers plans to do so in the future.
Real estate investors set their sights on data centers
"As the value of data increases, so does investor interest in data centers," says PwC partner and German Real Assets Leader Thomas Veith. "Recently, we have also increasingly observed larger transactions by institutional investors in this asset class." According to Data Center Outlook 2021, more than one in three respondents intend to invest in this young asset class within the next two years. A good quarter are targeting an investment volume of between EUR 50 million and EUR 250 million.
Level of knowledge still low
The study also showed that real estate investors would like to deepen their knowledge of data centers. The majority of respondents do not feel sufficiently informed about the specifics of the data center market.
About the Data Center Outlook 2021
PricewaterhouseCoopers (PwC) publishes reports and surveys on topics that move society. Whether they are timeless topics or those that have their finger on the pulse of the times. For the Data Center Outlook 2021, the GERMAN DATACENTER ASSOCIATION and PwC have now cooperated for the first time to ensure greater transparency in the data center sector, to provide an outlook on the German data center landscape and to illustrate its relevance for real estate investors.