Europe Data Center Colocation Investment to Reach $46.51 Billion by 2031

Investment in the European data center colocation market is expected to surge to $46.51 billion by 2031, a significant increase from $11.65 billion in 2025. The market is forecast to grow at a compound annual growth rate (CAGR) of 25.94% during this period.

Key factors fueling this expansion include the growing infrastructure demands from AI and cloud computing workloads. The ongoing digital transformation across industries, the rollout of 5G networks, sustainability initiatives, and investments in subsea cable infrastructure are also contributing to the sector's growth.

Western Europe is anticipated to remain the largest investment hub, accounting for approximately 71.3% of the total European investment by 2031. The Nordic region is projected to capture 22.8%, followed by Central and Eastern Europe at 5.9%.

The report also highlights a trend towards advanced cooling solutions, particularly liquid cooling, to manage the heat generated by high-density racks and AI workloads. The increasing adoption of AI is driving demand for specialized, AI-ready data center infrastructure across the continent.