Surge in new data centre projects sparks new work opportunities

Latest News Tue, Mar 12, 2024 7:47 AM

The development of new data centre projects across the country stands out as one of the most promising sources of new work for the construction industry in 2024.

The sector hit the headlines recently with the go-ahead for the huge £800 million Google Data Centre at Waltham Cross in Herts which will include an electricity substation and where work on some 62,000 sqm of space is getting underway this summer (Project ID: 23299434).

But Glenigan data also shows that across the country plans are being submitted and contracts awarded on a wide range of data centre projects of varying sizes which provide significant opportunities for new work.

Growth in the sector is being driven by strong demand for new data capacity to accommodate the spread of artificial intelligence.

A recent global survey by property services firm Turner & Townsend, which has a specialism in the data sector, showed that 88% of respondents said demand for data capacity for artificial intelligence/machine learning projects is increasing rapidly.

AI and machine learning platforms require an ‘exponential rise’ in computing capacity, says the firm, which will create further demand – and contract opportunities – on new data centre projects.

Meanwhile, growth in the sector is likely to continue to rise for the rest of the decade. A separate report from Savills last year noted that rising data consumption meant that international bandwidth is forecast to increase in Europe by 32% annually until 2029, creating a growing demand for data centre capacity.

Projects set to get underway

Glenigan data highlights the scale and variety of data centre projects which are set to get underway in the UK in the coming months, particularly around the M25.

In Chesham, Buckinghamshire, for example, tenders have been returned and work is set to start this spring on the £200 million Echelon LCY20 project (pictured). Work on the project to build a 30 MW, 26,000-plus sq m facility will run for 24 months (Project ID: 21472016).

Meanwhile, work could start towards the end of this year on a major project at Iver in Buckinghamshire, where Segro – the country’s largest developer of industrial space – has submitted detailed plans for a £352.6 million project involving three new data centres. In all, the scheme, Segro Park Iver, will cover over 92,000 sq m of space and work will run for 24 months (Project ID: 22210313).

In the South West, detailed plans have been submitted and a decision is expected this month on the £56.4 million P4 North data centre project at Corsham in Wiltshire for Ark Data Centres. If approved, work on the 20,000 sq m-plus scheme is due to start later this summer and run for 17 months (Project ID: 19442841).

Ark Data Centres is also the client on one of the smaller data centre projects which offer opportunities for new contracts. In Ealing, West London, site enablement works are underway, and construction is due to start this spring on a £10 million data centre at Alliance Park on the site of a former retail building (Project ID: 20359084).

Healthy long-term pipeline

Meanwhile, plans for numerous significant data schemes around the country suggest the long-term pipeline for new work in the sector should remain healthy. Segro has also recently submitted outline plans for a £271 million scheme, Bath Road Data Centre, involving two data facilities at Slough involving around 85,000 sq m of space where work is set to start in late 2025 (Project ID: 23369974).

Some significant new data centre projects are also on the drawing board in regions well beyond the capital. In the North East, outline plans have been approved for the huge £523.8 million Wilton Data Centre & Communications Campus to be built on a former ICI site at Redcar in Cleveland involving almost 160,000 sq m of space across two buildings. Work on the scheme for client CTW Northern, is due to start in mid-2026 and run for 37 months (Project ID: 16306231).

Another huge project in the sector’s long-term pipeline is the £1.7 billion London Data Freeport where the London Borough of Havering and DataReef are clients and where consultants have been appointed and a local development order may be used by the council. Work on the 390,000 sq m scheme, which will run over five years, could potentially start in late 2025 (Project ID: 22405932).

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