Amsterdam on Hold: The Latest in Data Center Developments

There are many reasons that Amsterdam has become such an attractive destination for data centers: a naturally cool climate, relatively affordable electricity, tax breaks and an advantageous geographical location are all contributing factors to the capital experiencing such growth in the data center sector. In fact, Amsterdam, including the surrounding region within a 31-mile radius of the city, is home to an estimated 70% of the data centers in the Netherlands. 

But the reason that the capital has become such a hotbed for data center activity has also caused the city to suspend new developments until 2020. In a press release from the Municipality of Amsterdam and the adjoining urban Municipality of Haarlemmermeer, Marieke van Doorninck, Alderman for Sustainability and Spatial Development in Amsterdam, stated (in a translation), “The arrival of data centers is, in a certain sense, a consequence of our own consumption and lifestyle: we want to be online on our phones and laptops all day. To a certain extent, we will have to accept the associated infrastructure, but the space in Amsterdam is scarce. As municipalities, we therefore want more control over the establishment of new data centers and we also ask them to contribute to the sustainable tasks of the city.” 

According to the release, the recent increase in the number of data centers in the area has put a burden on their real estate and power resources, occupying too much space and consuming excessive amounts of energy. The local government says it is simply pausing to consider new policies to better regulate the location of data centers and to ensure that any new construction projects meet certain standards.

Meanwhile, there is no sign of a break in the data center boom in the rest of Europe. Earlier this month, CyrusOne started its first phase of construction on its third data center in Frankfurt. The company plans to finish its London III facility at the end of this year as well. Equinix also announced earlier this month that it had entered into a joint venture with GIC, Singapore’s sovereign wealth fund, to invest in six new hyperscale data centers to increase capacity in Frankfurt, London, Amsterdam and Paris. 

Major investments in data centers are also taking place in North America, with GIC backing EdgeCore Internet Real Estate’s plans to build five campuses across the U.S. Arizona and Virginia continue to be emerging markets for data center growth as well. Compass Datacenters broke ground in early July on a new campus in Goodyear, Arizona, where Microsoft, Stream Data Centers, and Vantage Data Center also own land for future developments of large-scale data centers. In Manassas, Virginia, a joint venture between Alinda Capital Partners and QTS Data Centers plans to invest in building the first in a series of data centers that will receive up to US$1 billion in funding.

While new developments are temporarily stalled in Amsterdam, recent investments in the data center sector across Europe and the U.S. demonstrate the continued demand for digital management infrastructure.