A recent report shows that data centres in the UK are experiencing exponential growth as part of the expansion of the AI, 5G and internet of things sectors. There is now an urgent need for new sites and locations to be identified, as well as skilled labour, to meet forecasted digital infrastructure requirements.
As such, Investment Monitor has looked at the top regions for UK data centres as identified by foreign direct investors. Between 2019 and 2022, there were 1,565 new data centres set up around the world through foreign, not domestic, investment – according to GlobalData. Of these, 3.5% were established in the UK, a significant proportion that reflects the UK’s digital demand and industry heft.
In Investment Monitor‘s 2020 Data Centre Ranking, the UK ranked in the top ten global locations for foreign investment in data centres.
London dominates as top location for UK data centres
Digitalisation is a key theme for all companies, and in order to drive digitalisation efforts more and more data is being consumed, processed and stored.
“As a result, the need for data centres is very apparent. It is also unsurprising that much of data centre investments are in capital cities or central business districts,” says Glenn Barklie, chief economist at Investment Monitor. “In the UK, the majority of data centre FDI has been in London, as this is where the majority of companies in a country are based and are therefore utilising data on larger scales.”
London's sheer dominance highlights the UK's regional economic inequality, something that is mirrored by the geographic scattering of foreign direct investment (FDI) across the UK, both in the data centre sector and more generally across the economy. This show why the UK's 'Levelling Up' strategy was so important.
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"Data centre FDI to the UK has been strong in recent years, with year-on-year increases in project numbers," says Barklie. Key developments in the industry include rising demand for hyperscale data centres and the need for new data centres to be powered by renewable energy, he adds.
"There is also increased demand for data in remote areas, meaning rising demand for quirkier styles of data centres such as underwater or portable designs, as well as increasing demand for varied internet exchange points and points of presence," says Barklie.