Germany will overtake the UK in colocation datacenter capacity by 2031 due to EU sovereignty initiatives and AI-driven demand, requiring businesses to reassess data residency strategies.
The European datacenter landscape is undergoing a significant regulatory-driven transformation, with Frankfurt projected to displace London as Europe's dominant colocation hub by 2031 according to revised forecasts from the EU Data Centre Association (EUDCA). This shift carries substantial compliance implications for enterprises managing data residency requirements under frameworks like GDPR and emerging sovereignty regulations.
Revised projections indicate a 17% compound annual growth rate (CAGR) for colocation capacity across key European markets between 2025 and 2031, translating to an additional 5-6GW beyond prior estimates. EUDCA Secretary General Michael Winterson attributes this acceleration to geopolitical realignment and corporate response to "clear signals from the European Commission" regarding data sovereignty priorities. This regulatory pressure is driving capital reallocation toward EU territory, with Germany's combination of industrial infrastructure, central location, and financial stability positioning Frankfurt for dominance.
Under the forecast, Germany's colocation capacity will surge from 1.45GW in 2024 to 4.2GW by 2031, while the UK declines from first to second place despite growing from 1.7GW to 3GW. Crucially, Frankfurt's projected 2.5GW capacity will exceed London's 2.1GW. The broader FLAP-D markets (Frankfurt, London, Amsterdam, Paris, Dublin) will collectively expand from 5.3GW to 11.5GW during this period. For hyperscale operations, Ireland maintains decisive leadership with 1.8GW projected capacity.
Compliance officers must address three critical requirements stemming from this shift:
- Data Residency Alignment: Organizations storing EU citizen data must verify colocation providers meet sovereignty requirements under GDPR Article 27 and emerging frameworks like the Data Governance Act. Contracts should explicitly confirm physical data location within preferred jurisdictions.
- Infrastructure Resilience Planning: The EUDCA report emphasizes fiber route diversification as a sovereignty priority. Compliance teams should audit existing providers' network redundancy and disaster recovery protocols against ENISA guidelines.
- Energy Compliance: With power access cited as a sector-wide constraint, organizations must ensure colocation partners demonstrate compliance with Energy Efficiency Directive (EUD 2023/1791) benchmarks and provide transparent carbon reporting.
The transition timeline presents urgent operational challenges. Winterson notes the industry requires 2.6 times more skilled personnel by 2031, potentially creating compliance gaps in maintenance and security protocols. Grid limitations also threaten service continuity, as seen in recent UK construction delays. TechUK's Katie Davis emphasizes that resolving "regulatory fragmentation and energy costs" is essential for maintaining compliance postures.
Recommended compliance actions:
- Conduct sovereignty impact assessments on existing colocation contracts by Q3 2026
- Negotiate termination clauses tied to location changes in provider agreements
- Develop migration roadmaps for EU-based data workloads by 2028
- Verify colocation partners' adherence to EU Energy Efficiency Directive standards
Failure to adapt risks non-compliance with evolving sovereignty requirements and potential service disruptions. Proactive planning aligned with the 2031 forecast is essential for maintaining regulatory adherence in Europe's redefined digital infrastructure landscape.
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