Christina Mertens, vice president of business development, EMEA, at VIRTUS Data Centres looks at the transformation of smart buildings.
In the rapidly evolving landscape of Europe's digital ecosystem, a profound transformation is underway - one that directly impacts the foundation of smart buildings.
For decades, the continent's data centres, the backbone of cloud computing, and interconnected systems, and more recently AI-driven analytics, were concentrated in the FLAP hubs: Frankfurt, London, Amsterdam, and Paris. These metropolitan powerhouses benefited from proximity to financial sectors, global carriers, and dense digital networks. However, as smart buildings increasingly rely on real-time data processing for energy management, automation, and Internet-of-Things integration, the limitations of these core locations are becoming evident. Power delays, limited land availability, and stringent regulations are pushing development outward, heralding a new era where secondary, or "tier-two," locations are essential for sustaining Europe's smart infrastructure growth.
The surge in demand for computing power is staggering. McKinsey projections indicate that global data centre capacity could triple by 2030, driven by AI training, high-performance computing, and modernised public services - all critical for smart buildings that optimise energy use, security, and efficiency through data analytics. Europe's installed capacity is expected to more than double from 24 GW in 2025 to 55 GW by 2030, with secondary markets leading the charge. According to CBRE, while 57% of new capacity in 2025 will still emerge in FLAP-D (including Dublin) markets, the remaining 43% will flow to places like Milan, Madrid, and Berlin, many poised to surpass 100 MW individually. This decentralisation is not a fringe trend; it's vital for accommodating the energy-intensive needs of smart technologies that make buildings "intelligent."
What defines a successful tier-two location?
A blend of abundant power, robust connectivity, ample space, supportive policies, and economic viability - elements that enable the construction of expansive data centre campuses – make tier two locations attractive for data centre construction. Power availability tops the list, as the European Commission has highlighted strains on electricity networks from escalating digital demands. Traditional locations face finite grid headroom, with new substations challenging to build in urban densities.
In contrast, regional sites offer room for scalable electrical infrastructure, crucial for AI workloads that demand consistent megawatt allocations. For smart buildings, this means reliable data flows for predictive maintenance and adaptive systems without the bottlenecks being experienced by city centres.
Network connectivity has also evolved, with new terrestrial and sub-sea fibre routes democratising access beyond FLAP. This reduces latency, allowing data centres in tier-two locations to efficiently support smart building applications like remote monitoring and edge computing.
Physical space is another factor: operators favour large plots for multi-building campuses that facilitate shared energy systems and advanced cooling - essential for handling the heat generated by dense servers powering building automation. Planning alignment, bolstered by national strategies like Italy's Recovery and Resilience Plan, provides regulatory predictability, while lower land costs (30-60% cheaper than in metros) make these sites economically attractive for long-term investments.
The outward shift is propelled by scarcity in major cities. In the UK, the National Grid warns of pressure on London's network from data centres and AI. Similar challenges afflict Amsterdam and Frankfurt, where environmental and cooling constraints limit expansion. AI's continuous power needs favour regional scalability, where substations and cooling networks can be integrated seamlessly.
Policy plays a role too; European governments promote distributed infrastructure for economic resilience, linking it to industrial modernisation and digital public services. This aligns perfectly with smart buildings, which thrive on resilient, decentralised data ecosystems to enhance urban sustainability.
The human and economic effects
Beyond technology, this evolution has significant human and economic ripple effects. Large campuses become employment anchors, fostering skills in operations, engineering, and security. A PwC study on US data centres – useful as a benchmark - shows each direct job supports over six indirect ones, with employment surging 50% from 2017 to 2023.
In Europe, similar impacts are emerging. UK and continental projects promise thousands of construction roles and hundreds of permanent high-skill positions, boosting local supply chains in trades, facilities, and services. For smart buildings professionals, this means new opportunities in integrating data centre technology with building management systems, potentially tying into local education for apprenticeships in digital infrastructure.
Real life examples
Milan exemplifies this tier-two renaissance. As a hub in northern Italy's industrial belt, it combines enterprise demand with large edge-of-city sites for phased campus development. VIRTUS' new facility underscores Milan's stability, intersecting economic routes and supporting Italy's digital ambitions. This positions it as a strategic anchor for regional workloads, enhancing smart building deployments in logistics and finance sectors.
Similar clusters are forming elsewhere. In Germany, the Berlin-Brandenburg corridor, including VIRTUS’ Wustermark's €3bn, 300MW project, leverages sustainable energy and transport networks amid Frankfurt's constraints. The Nordics attract investment with renewables and natural cooling, ideal for energy-efficient smart infrastructure. Iberia, via new sub-sea cables, elevates Madrid, Zaragoza, and Lisbon as gateways, bringing capacity closer to southern populations and industries.
Signals point to persistence. Upward-revised AI power forecasts from the IEA, EU energy reporting mandates favouring spacious sites, and expanding fibre networks. Tier-two locations enable integrated campus designs for high-density workloads, aligning with national priorities like the UK's AI Growth Zone in North Wales, and bolstering resilience against localised disruptions.
Conclusion
Challenges remain, however. Securing grid capacity requires utility coordination, planning varies by region, and building skilled labour pools is ongoing. Environmental standards demand efficiency, heat recovery, and renewables from the start, necessitating operator-regulator partnerships.
Ultimately, Europe's distributed digital future is bright for smart buildings. Tier-two hubs like Milan and Berlin aren't mere backups – they are the scalable foundation for resilient, AI-powered infrastructure. By addressing power and space constraints, they ensure smart buildings can evolve, driving efficiency, innovation, and sustainability across the continent. As this shift accelerates, it promises a more balanced digital ecosystem, empowering buildings to be truly intelligent in an interconnected world.