Even before the pandemic, rapid growth of data centres in Poland was predicted, but two years of the pandemic gave this sector an even greater growth impulse. Our country has the potential to catch up with the key Western European cities for this market within a few years and to become a hub for Central and Eastern Europe. Especially since this region is not yet saturated. There are currently around 100 data centres in our country, and investments by giants such as Amazon and Google will appear soon. Access to cost-effective and green sources of electricity is of great importance for the further development of data centres in Poland.
Companies' demand for data centres increased significantly during the pandemic. The industry's development accelerated by several years. This was driven in particular by the popularity of e-commerce, remote work and the broadly understood digitalisation of businesses. We can see that the number of enquiries from investors remains at a high level. Large cities and their surroundings, which offer good access to electricity and fibre optics, attract the greatest interest. At this pace of growth, land suitable for such investments is already beginning to run out. As a result, in the future some land, e.g. designated for warehousing, may be converted for data centre construction. Each plot is prepared to meet the needs of such facilities, but even investments on demanding sites remain profitable for investors.
Polish land on data centres' radar
Land in our country is still relatively cheap, as is electricity, which is crucial for carrying out such investments. Land prices are particularly important because companies needing data centres are not interested in leasing properties. Operators buy them, as this is the only way they can ensure a sense of security and continuity of the facility's operation. The cost of installing IT infrastructure is too high to move it from place to place. It also cannot be switched on and off at no cost, because it is critical to the functioning of the entire organisation and to doing business. That is why leasing or sharing a building with other institutions is seen as a threat, not only to business continuity but also to data security.
When it comes to land sought for such investments, we are dealing with two trends. The largest players are looking for plots of around 12 acres, while smaller companies are looking for plots of around 5 acres. The list of requirements is long. An average area does not always meet the needs of data centres. The site should not be located near, for example, factories or railway lines due to possible vibrations. Flood-prone land cannot be designated for this purpose either. It must provide access to at least two stable sources of electricity and fast fibre-optic internet.
Warsaw for the largest investors
Currently, around 60 per cent of all data centres are located in the capital and its surrounding areas, according to data from the research firm PMR. Warsaw attracts primarily the largest international investors, because this is where they most often conduct their operations. The human resources pool is also largest here. And although our capital is a relatively easier market than London or Frankfurt, competition for land with the logistics sector may be troublesome for investors. The criteria for land for development are similar for both industries.
Will Poland become a data centre hub in Europe?
Other large Polish cities also matter for the domestic development of the data centre sector, but the scale is much smaller. Smaller domestic businesses that need non-commercial data centres tailored to their own needs are looking for land for such investments there. Kraków plays the largest role in the local market, with around 13 per cent of such facilities. Next come Poznań, Wrocław, Łódź, Toruń, Szczecin and Gdańsk.
Green energy
The first question we hear from clients looking for land for data centres is about stable sources of electricity. An important aspect is the origin of the energy, which should at least in part be supplied from renewable sources. Companies investing in data centres are largely banks or insurers, for whom sustainable development and environmental protection are important. The ideal situation is to locate green energy sources close to the plot. Access to this type of electricity would also be increased by the use of nuclear power. However, the shortage of renewable energy resources in our country should not have a negative impact on the development of the data centre market. The amount of green energy in Poland should increase, and it is also possible to buy it from other European countries.
A market with potential
Compared with other countries in Europe and around the world, Poland remains an untapped data centre market. We are at an early stage of development, the market is fragmented, but it has great potential, which makes it an interesting location for investors. We can soon expect investments by the largest global players.
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