Latin America. Cushman & Wakefield released its most recent report on the data center market in the Americas for the first half of 2024. In the report, the company highlighted significant growth driven by demand for infrastructure for artificial intelligence (AI) and cloud services.
It also highlighted that during the first six months of 2024, the absorption of new data center spaces reached or exceeded the record levels set in 2023, reinforcing the importance of this sector in digital transformation.
In Latin America, emerging regions such as Bogota, Queretaro, and Santiago have seen an increase in demand for data center infrastructure, driven primarily by the expansion of cloud services and the adoption of AI in the region. Bogota, in particular, has experienced a significant increase in data center construction, positioning itself as one of the most dynamic secondary markets in Latin America.
According to Juan Carlos Delgado, Country Manager of Cushman & Wakefield in Colombia, "The growth of data centers in the Americas reflects the growing digitalization of the region. The demand for robust and secure infrastructure is increasing, driven by the expansion of cloud services, the development of artificial intelligence, and the growing need for data storage. This boom is also due to the digital transformation of various industries, which require efficient and scalable solutions to handle large volumes of information. Investment in sustainable technologies is gaining momentum and leading to the implementation of more responsible practices in the management of these centres. Together, these factors are shaping a dynamic and competitive landscape in the technology sector in the Americas."
In the case of North America, operating capacity has increased to 18.5 gigawatts (GW), with an additional 1.7 GW in new developments. Key markets such as Virginia, Phoenix, Dallas and Silicon Valley remained at the forefront of this expansion. The first of these stood out as the largest data center market globally, with a combined operating capacity (including ongoing construction and planned projects) of 13.2 GW. "The availability of land with sufficient energy capacity continues to be a fundamental challenge in this region, where vacancy has decreased to levels below 1%, which has driven an increase in the prices of leases and hyperscale projects," added the executive.
Despite the expansion in supply, demand has outpaced supply in most markets, causing vacancy rates across the region to fall by about 3%. This is reflected in the fact that more than 80% of the new projects delivered in the main markets were already pre-leased before their completion. Additionally, about 78% of the projects delivered during the first half of 2024 were part of custom or pre-leased developments, and many of them aimed at cloud expansion and AI data processing.
Power availability has been highlighted as the main hurdle for developers, as many operators are looking for delivery times of between two and three years, but face schedules of more than five years in different markets. This has led some operators to collaborate directly with energy providers to accelerate the construction of substations and transmission lines or even to generate power through alternative sources such as solar, wind, battery storage, and in some cases, geothermal.
On the other hand, AI data centers have quickly become an integral component of both hyperscale and colocation development projects. AI training facility plans are primarily focused on large, rural, latency-tolerant locations, while AI inference facilities are strategically positioned near major cloud regions to reduce response time.
With demand continuing to outstrip supply in many markets, vacancy rates are expected to continue to decline, driving up rents and encouraging the development of new infrastructure, especially in emerging markets such as Latin America and rural areas.
