Surge in digital economy opens up new markets for data center operators, as Arcadis report explores top locations to build

• US, Singapore, and Japan top the rankings as most attractive places to build data centers, according to new Arcadis Data Center Location Index 2021
• UK ‘one to watch’, with strengths in cyber and energy security proving attractive for investment
• Resiliency and sustainability key considerations driving decision making process

The UK has emerged as one of the leading up-and-coming new locations for data centers worldwide, challenging global frontrunners like the US, Singapore and Japan in its ability to attract both major international operators and smaller domestic players. The results are according to Arcadis’s new Data Center Location Index 2021, which ranks the top markets for data centers worldwide.

While the top positions in the index are dominated by well-established locations like the US in first place, and major financial locations like Singapore in second, European countries such as Sweden, Norway and Denmark all rank highly in fourth, fifth and sixth place respectively, thanks to their energy security, reliable power grid and access to renewables.

Meanwhile, the UK has emerged as ‘one to watch’ in 13th position, with high scores in cyber and energy security making it a prime target for investment. As a critical interchange between North America and the rest of Europe, the UK’s position in the rankings will be further boosted thanks to the ongoing roll-out of FTTP (fibre to the premises), which will align it more closely with neighbouring countries and increase data consumption in the future. Brexit, however, has posed a risk. Leaving the EU will have an impact on the data hosting and media streaming market, with operators potentially needing to build additional capacity in both the UK and Europe as a result.

The worldwide data center industry accounts for around 1% of global electricity usage, meaning that power is often the single largest operational expenditure item. Reliability and security of supply are therefore parmount, but many data centers have large carbon footprints as a result. Companies are increasingly exploring ways of decarbonizing their operations to comply with 2050 net-zero carbon targets, using techniques such as immersion cooling and heat recovery, as well as limiting embodied carbon through new methods of construction to help decarbonize the build and operation process. Many operators are also exploring locations in colder climates, reducing the costs of cooling, as well as in places that offer ready access to renewable energy.

Natalie Sauber, Arcadis UK Market Intelligence Lead, said:

“Demand for data infrastructure was already sky-high before 2020, but with our lives now moving increasingly online, there has been a huge surge in data creation and consumption - nearly one billion more people will become mobile broadband users over the next five years. This, in turn, means we need to build resilient infrastructure that can cope with this phenomenal growth in demand.

“Although a data center can be located nearly anywhere, there are a number of critical factors that influence cost and return on investment. From the availability and reliability of renewable energy sources, and the ease of obtaining construction permits, to the price of electricity, cybersecurity, data protection and privacy regulations; all of these things can differ significantly depending on where a facility is located. Getting it right is critical and, while each data center is unique, this index can provide a starting point to help clients think through the decision-making criteria.”

The Arcadis Data Center Location Index ranks 50 markets across six continents, and is based on each market’s performance across eight key criteria: GDP per capita, dealing with construction permits, price of electricity, energy security, cybersecurity, domestic market size, the number of mobile broadband subscriptions and mean download speed. The results provide insights that can be used to guide the decision-making process, together with a roadmap leading from location choice through to planning, permitting, construction and operation.

Peter Oosterveer, Arcadis CEO, said:

“Arcadis has the global scale and expertise to help accelerate the building of data center infrastructure that supports our digital lives. We help clients make the best location choices and other decisions that result in a solid, sustainable investment that benefits all stakeholders, including the community.”

Global top 20 ranking in Arcadis’ Data Center Location Index 2021:

A copy of the report is available for download here.