2022 Global Data Center Market Comparison

Land Price

While the cost of land ends up a small fraction of the total cost of data center construction, higher initial land pricing can provide certain barriers of entry and are a concern in several key data center markets that have grown accustomed to the largest deployments. Several factors contribute to a quality data center: access to power (and a supportive utility to work with), limited exposure to natural disasters, access to networks, provision of water for cooling systems, and potentially incentive packages for locating in a particular area. The best markets have all of these and still maintain a low cost of land, a very tricky balance with sites being in such demand. The competition for sites with other asset classes has become more acute over the past year, as distribution supply chains move closer to the residential customer and cities with constricted housing markets willingly re-zone formerly industrial land for residential purposes. Defining the data center edge will be an interesting challenge in coming years. Workloads may have to be further optimized for latency, and in certain instances relocated to areas with less constricted land. The possibility of smaller footprints over the long- term may return to consideration, with true hyperscale potentially moving further outside large metropolitan areas.

Top markets receive high marks in key categories and yet still maintain a low cost of land, a very tricky balance with sites in such demand. Finishing throughout the top ten in lowest land cost are mainly cities across secondary and lower primary markets in the U.S., with Columbus leading the way and Atlanta, Phoenix, Denver, Salt Lake City, Dallas and Las Vegas also ranking high. Most of these cities continue to have ample land for development, with few geographical constrictions and less density than more highly urbanized environments. Johannesburg also finished in the top ten this year, along with new markets Santiago and Bangalore, both of which are receiving increased interest from data center operators and hyperscalers alike.

Top Markets

Columbus Johannesburg Santiago† Atlanta Phoenix Denver Salt Lake City Dallas

Las Vegas Bangalore†

† New market in 2022 report

32 / CUSHMAN & WAKEFIELD