Global data centres to surge as tech giants secure new capacity

This will minimise the risk of excessive unoccupied capacity in the market, said Moody’s.

Global data centre capacity is expected to grow rapidly, with most of the new capacity coming online being preleased to Microsoft, Google, AWS, Meta, and Oracle, according to Moody’s 2025 Outlook: Global Data Centre report.

This will minimise the risk of excessive unoccupied capacity in the market and help maintain lease rates.

The report also noted that new colocation data centre capacity is being developed to cater to small and medium-sized tenants who pay higher lease rates on a per kilowatt per month basis, resulting in better margins for the landlord or owner.

Additionally, vacancy rates might temporarily rise in some markets until the newly available colocation capacity is fully leased.

However, they will likely remain low in most markets, except for China and Hong Kong SAR, where owners have limited ability to sell excess capacity to clients in neighbouring countries because of data localisation and sovereignty laws.

Furthermore, data centres are often refinanced through the commercial mortgage-backed securities (CMBS) or asset-backed securities (ABS) markets upon completion.

Both markets saw record activity in 2024, which is likely to extend into 2025, including new transactions for data centres outside the US.

In June 2024, Vantage Data Centers closed the first ABS transaction outside the US and the first data centre ABS transaction in EMEA when it raised £600m ($730m) in securitised term notes and an additional £100m in unfunded variable funding notes.

The notes will be used to refinance £480m ($584m) of debt for two facilities on Vantage's 148 MW Cardiff, Wales, campus.