The unstoppable expansion of data centers is no longer an exclusive phenomenon of the major American “triangles.” By 2025, the race to secure land and megawatts for AI, cloud, and HPC is reshaping the map also in Europe, with Madrid rising strongly in the global league. What a little over a decade ago was territory dominated by Frankfurt, London, Amsterdam, Paris, and Dublin (the classic “FLAP-D”) has expanded to include München, Berlin, Warsaw, Milan, Zurich, and Marsella, and — increasingly visible — to Madrid, Lisbon/Sines, Barcelona, and Turin. The pattern repeats: where there is available energy, core fiber, and a pro-business administration, land prices skyrocket.
The core thesis is simple. In several traditional Tier-1 hubs, what’s missing is not land; what’s absent is power. Due to moratoria or electricity caps in Dublin and practical limits in areas like London and Amsterdam (after their well-known moratoria, now lifted under specific conditions), many investments have migrated to geographies with megawatts and good international connectivity. This change in course has spurred secondary corridors that, in a very short time, have become key players in Europe’s digital economy.
“In Europe, there is a rebalance toward the south and east for very pragmatic reasons: renewable energy, large-scale land, and route diversity. Madrid is now a first-tier bet to deploy AI with low latency towards the Peninsula, North Africa, and the rest of the continent,” says David Carrero, co-founder of Stackscale (Aire Group), a European provider of private cloud and bare-metal services working with reference data centers in the region (Stackscale does not build or operate data centers; it provides services on top of them).
Why Europe’s “bottleneck” is no longer land, but megawatts
Demand figures tell the story: 50–80 kW racks are becoming standard for AI clusters, and the phases of new campuses are measured in tens or hundreds of MW. In this context, having a parcel of land without guaranteed electrical capacity is equivalent to having nothing. Operators prioritize locations with expandable substations, nearby transmission lines, and a renewable mix that, besides reducing costs in the medium term, helps meet ESG commitments.
This is where Europe has shifted the landscape: countries with high renewable penetration and available space outside urban cores are now focusing the pipeline. Spain and Portugal stand out for their wind-solar mix and new submarine cable landings (which add routes and reduce latencies), while Italy is gaining prominence in the north (Turin, Milan), Poland is solidifying its role as a gateway to the Baltic and Ukraine, and France is extending its reach from Paris and Marsella to nodes near hydroelectric corridors.
Madrid: from an alternative to a leading actor
Madrid is no longer vying for a symbolic share: it is growing as a meeting point for hyperscalers, colocation, and private cloud and bare-metal providers. The city consolidates several decisive factors:
- Energy and scalability: increasing electrical capacity with expansion options, compatible with renewables, and with potential for campus development.
- Connectivity: backbone networks, presence of neutral points, and new submarine cables improving routes to the US, Latin America, North Africa, and the Middle East.
- Regional latency: low latency with Iberia, south of France, Morocco/Algeria, and good transit times to Paris, Frankfurt, and Milan.
- Talent and ecosystem: a growing network of providers, integrators, and SRE/MLOps teams needed to operate high-density AI.
The impact on the tech real estate market is evident: parcels in industrial peripheries have appreciated, and transactions linked to campus projects — often phases of 50–100 MW — compete with traditional industrial uses. Unlike other cities, Madrid’s advantage is in its regulatory stability and market size, along with its role as a historic financial and business hub of the Peninsula.
“Madrid has shifted from being a ‘nice to have’ to a ‘must’ on European expansion maps. For high-performance AI and bare-metal, the city offers latency, energy, and an ecosystem that understands 80 kW/rack and liquid cooling. We see this daily with clients who need to deploy now, and we can assist according to their project,” highlights Carrero.
Beyond the “FLAP-D”: rising European cities
- Frankfurt and Paris remain active, but with restrictions on new connections in specific areas —electricity is the main driver—.
- London continues to be a reference, although some projects are moving to suburban belts with more electrical capacity and affordable land.
- Amsterdam has moved beyond its moratorium with conditions; today, water efficiency and energy are crucial filters.
- Dublin remains constrained by quotas: part of Ireland’s growth is looking toward counties with better power windows.
- Marsella is consolidating as the Mediterranean gateway due to cable landings and its interconnection role toward Africa and Asia.
- Milan/Turin and the north of Italy capitalize on industry and intra-European connectivity; Warsaw grows thanks to its geostrategic position and being an eastern border of the EU.
- Lisbon/Sines and Barcelona jump on the bandwagon due to cables and renewables: the mega campus in Sines and projects along the Catalan coast attract unprecedented interest.
The common denominator remains the same: where there are megawatts and fiber optic connection, land prices rise. And if renewables or hydro are nearby, the appeal multiplies.
Side effects and social debate
Like in the US, the reclassification of agricultural or industrial land to digital use skyrockets land values and increases tax revenues (IBI, rates), funding services and infrastructure. It also drives infrastructure development (substations, transmission lines, fiber) benefiting local communities. However, there are resistances: water, noise, landscape, and housing are areas to monitor to prevent tensions with residents. The social license of these projects weighs — and will continue to weigh — as much as the urban planning permits.
Simultaneously, analysts warn of potential overvaluation in secondary markets, where speculative land acquisitions outpace real land availability (utility MW). Without firm commitments on capacity and connection dates, no campus can be considered secure.
What it means for companies (and how to respond)
- Colocation will be more expensive in “alternative” markets. Land and power prices are rising; budgets must adapt accordingly.
- Assess land pipelines and provider expansion plans: the current data center isn’t enough; look at next 24–36 months.
- ESG and reputation matter: building on agricultural land requires renewables, water efficiency, and dialogue.
- Latency matters: Madrid, Marseille, or Milan bring employees and clients closer; choosing the right location reduces network costs.
For high-density AI loads, bare-metal on high-density colocation (liquid cooling, 415 V, A/B PDUs) is currently the fastest route: GPU deployment time in months versus years of “build-your-own.” (Stackscale, for example, provides private cloud and bare-metal on European reference data centers; not building or operating data centers).
Madrid: a key piece in Europe’s AI value chain
The latency to the Peninsula, Mexico/Latin America via transatlantic links, North Africa, and the rest of Europe places Madrid at the center of a mesh that AI demands: training where there is megawatts, inference nearby users, and data replicas via diverse routes. With liquid cooling and 80 kW/rack GPU pods, Madrid can anchor training clusters and serve low-latency inference to Hispanic and European markets.
The proof is in the details: planned substations, long-term energy contracts, and an ecosystem familiar with D2C (direct-to-chip), immersion cooling, Infiniband/Ethernet 400G, and NVMe at scale.
Operational recommendations for projects in Spain/EU
- Energy: demand signed capacity, dates, and, if possible, renewable PPAs.
- Cooling: request liquid (D2C/immersion) cooling via contract from 50 kW/rack; water and recirculation should be audited.
- Fiber: ensure diverse routes to IX, clouds, and submarine cables; SLAs for latency.
- Permits: secure environmental studies and early community engagement.
- Scalability: clear expansion options (MW/m²) within 24–36 months.
Which European cities will follow the trend?
Besides Madrid, likely focal points are where energy, land, and fiber converge: Sines/Lisbon, Barcelona/Tarragona, Marseille/Provence, Piedmont/Lombardy, Silesia/Warsaw, Bavaria, and Vienna/Bratislava as cross-border pairs. In the medium term, Scandinavia will continue to attract loads driven by renewables and natural hyper-cooling, although latency to the south and west is not always suitable for interactive AI.
Conclusion: securing land (and MW) is strategy, not logistics
The expansion of data centers is rewriting the land market in both the US and Europe. Madrid has transitioned from an alternative to a main player, in a wave led by Columbus, Reno, Salt Lake City, San Antonio, and Hillsboro on the other side of the Atlantic. In Europe, this fever translates into price hikes, speculation alongside fiber corridors, and a legitimate debate around land use and water.
Companies must anticipate: providers with a pipeline of land and megawatts will prosper; latecomers will pay more or be left out. For Madrid, the opportunity doubles: technological — to be a hub of AI, cloud, and edge — and social — translating revenue into training, housing, and resilience for the city. The digital economy isn’t built just on racks; it’s also about trust.
Frequently Asked Questions
Why has Madrid become a key point for data centers in 2025?
Due to the combination of available and scalable energy, good connectivity (including nearby submarine cables and backbones), and competitive latency to Iberia, Europe, and North Africa. Additionally, the local ecosystem (operators, colocation, private cloud/bare-metal) is prepared for high densities (liquid cooling, 80 kW/rack).
Which other European cities are seeing significant land price increases for data centers?
Marsella/Provence, Milan/Turin, Warsaw, and Zürich, along with secondary markets in Bavaria and Vienna/Bratislava. In the Peninsula, Sines/Lisbon and Barcelona are emerging due to cables and renewables.
How does this land craze affect colocation costs?
Higher land prices and electrical constraints tighten supply, leading to rising rents even in previously affordable markets. It’s advisable to budget upward and prioritize providers with guaranteed land and power for the next 24–36 months.
What role do Stackscale and bare-metal play in this environment?
Stackscale provides private cloud and bare-metal on reference data centers across Europe (not building or operating data centers). Bare-metal offers high-density AI and HPC capabilities, with direct hardware access, compliance, and reliable SLA, utilizing campuses already equipped with power and liquid cooling.