Over the last decade, we’ve seen a rapid rise in the number of ‘mission critical’ projects receiving planning consent, with shovels regularly going into the ground across the UK to deliver these essential pieces of infrastructure.
With consumer energy demand and reliance on public services set to increase over the next 10 years, there’s no doubt we’ll see more work undertaken on these types of projects.
Further, as professional and personal appetite for digital technology rockets, we will need to achieve the required capacity to support. To meet this challenge, one particular area which will see an exponential rise in activity will be data centre construction.
For context, in 2020 the global market for data centre construction was estimated to be worth £15 billion and expected to reach £24 billion by 2027. Further, a report published earlier this year by Arcadis highlighted that the UK’s superior cyber security and strategic location made it a ‘prime target’ for data centre investment.
It represents a huge opportunity for the UK construction sector, from designers and contractors through to building component and construction technology suppliers.
London, which Arcadis highlighted as Europe’s largest data centre market, will see a number of exciting projects commence in the coming years, from a £45.6m Data Centre Campus in Hillingdon to a £19.5m three-storey data centre planned on the site of the former Truman’s Brewery in Tower Hamlets.
Whilst these projects are at the planning stage, my economics team has also identified other projects further forward in the pipeline in Ealing, West London. Tenders have been returned for a £10m data centre scheme at Concord Road and ISG has landed the contractor’s role on the first phase of an £81m data centre scheme in the borough for Vantage Data Centers.
Equally, a number of projects are already underway, including the £230m KAO Data Campus in Harlow and the £600m Union Park Scheme in Hayes. Essentially these sizeable investments are all part of an effort to keep up with the desire for affordable, plentiful data as work, rest and play moves further online.
Now proliferating out of The Capital and into the Home Counties with sites such as the £38m centre at Corsham in Wiltshire and the £15.4m scheme in Farnborough, the market is growing at a super-fast rate. We expect it to turbocharge across the UK in 2022-2023, helping to re-establish the UK as a global technology leader.
That’s just the tip of the iceberg, in a country that is embracing data centre construction to satisfy current and future national and international consumption.
With new projects being announced almost daily, it’s the perfect time for contractors to explore the large number of opportunities arising within this lucrative niche. With the market only set to grow, you need to position yourself now to grab a piece of the action.
Allan Wilen, Economic Director, Glenigan
Allan heads up Glenigan’s Economics Unit and has over 30 years’ experience in providing insightful market analysis and forecasts on UK construction and the built environment. Following 20 successful years as Economics Director at the Construction Products Association, Allan joined Glenigan 12 years ago. During this time Allan and his team have helped hundreds of businesses confidently develop their market strategies.
Allan sits on the Consulting Committee on Construction Industry Statistics for the Dept for Business, Energy & Industrial Strategy (BEIS), is a member of a Construction Leadership Council working group and is a guest lecturer in construction at the University of Reading.