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Spain, The Data Center Kingdom

Why Spain is becoming the main digital hub in Southern Europe

 

2022 is becoming the year where Spain is stepping up and taking the lead in Southern Europe to turn into the main digital hub in the region, the country is becoming The Data Center Kingdom. The Spanish market is benefitting from various advantages compared to the FLAP market and other countries in the area: What are the reasons why international investors are choosing Spain to invest in Data Centers?


Privileged geographic position for Data Centres' instrastructures

As interconnection ecosystems develop in increasingly decentralized markets, international connectivity is concentrated in relatively close intraregional areas. From that point of view, Spain (and Portugal) has a strategic position for both distributing and receiving content. Madrid and Barcelona are the main cities in the Iberian Peninsula for this boosting market.
Taking into consideration standard applications of maximum allowed latency (65ms equivalent to ~5.500 km), the Iberian Peninsula would be within the scope of regions such as North America, South America, North Africa and Central Europe. In addition, Madrid, the Spanish capital, is located in the centre of the Peninsula where robust interconnection takes place, has equidistant access to the entire population of both Spain and Portugal. 

An ideal landing station for submarine cables

Spain’s geographical location has helped to promote the international visibility of the country for the termination of submarine cables.

The Iberian Peninsula is a strategic point of connection in the technological infrastructure network between North America, LATAM, Africa and Europe. The installation of submarine cables from these regions, started years ago. There are many new submarine cables infrastructures in the pipeline reinforcing existing essential routes to the region and opening new routes and opportunities to establish an increasingly diversified and low-latency interconnection.

Upcoming projects in the Iberian Peninsula in 2022 include Bilbao (Grace Hopper) and Lisbon (EllaLink), which contributes to considering Spain as a strategic point for investors interested in Data Centers.

Top-class fibre connectivity

Spain is one of the most and best-connected countries within Europe, having a strong fiber network throughout the country with a vast infrastructure of backbones and dark fiber. Madrid is one of the main telecommunication nodes in the Iberian Peninsula, having two of the main Internet Exchange Points (Espanix and DE-CIX), connected by the submarine cable extensions into America and Africa. Barcelona Cable Landing Station will support the Data Center infrastructure in Catalonia and begins the first international submarine cable landing station in this Region with the aim of being the digital port of reference in the Mediterranean. It is expected to start operating at the end of 2022. Given the saturation of the other connectivity hubs, projects envisaged in the coming years will further improve Spanish connectivity. 

Leading renewable energy generation

The Data Center industry is facing two main challenges regarding energy: power constraints in both Western and Northern Europe and hard energy efficiency requirements to comply with the industry ESG targets.

In that regard, Spain, compared to the FLAP markets, is not experiencing the power scarcity that Ireland or The Netherlands are suffering. This power constrains have led to moratoriums for data center developments in those countries. Additionally, Spain is Europe’s champion in renewable energy production and intends to increase its renewable generation capacity (wind and photovoltaic power) by at least 3GW/year in the coming decade. Renewable energy already accounted for 47% of total annual generation in 2021.

 

Hyperscalers prioritizing Spain

The pandemic has accelerated the interest in Spain as a preferred Data Center location, with the entrance of new players of large public cloud or BTC platforms. Furthermore, hyperscalers such as AWS, Microsoft, Google or IBM have publicly announced and pointed to Spain as a strategic cloud region and others, such as Meta, are developing large campuses.

The fact is that hyperscalers are turning their objectives towards the peninsula due to the problems and obstacles they are encountering in Western & Northern Europe (e.g., Meta-Zeewole). 

All these facts resulted in Spain being considered as an area of high attraction for both operators and investors expecting to receive investments in the data center sector up to more than 6.8 billion euros between now and 2026. According to our Data Center Snapshot for Iberian Peninsula Spain will reach a supply of 773 MW including current supply (113 MW) and pipeline (both secured and uncertain).

 

Download the report for further details and the latest trends & data in the Spanish Data Center Market.

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Related Experts

Jose Guilleuma

Director Data Center

Madrid

I have  joined Colliers International in March 2022 as Data Center Director.

I have 10+ years experience in the telecoms industry (10+ years), all of them in Telefonica. For the last 2 years I have been part of Telefonica Infra, focusing on project finance, M&A and portfolio management related to infrastructure assets mostly data centers and fibre. Prior to that I was part of the Corporate Strategy area where I participated in spectrum acquisition processes and developing strategic opportunities related to infrastructure. 

I began my career as consultant in Accenture Strategy.

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