The data centre market in Poland will grow at a double-digit rate in the coming years. Similar to Western Europe, Poland will become an attractive investment target, driven both by the development of new technologies and the prospect of increasing consolidation and professionalisation in the sector. In addition to the ongoing demand for infrastructure, the industry is challenged by ESG and EU KPI reporting requirements.
The increase in installed capacity is due to the growing demand for digital services, particularly in the cloud, and the dynamic development of new technologies like AI. The specific nature of the technology also argues in favour of expanding existing and creating new infrastructure – data centres should be located as close to the user as possible to avoid data latency. Additionally, in the case of industries like the financial services sector, the need for data residency is enforced by legal regulations. In a broader context, the Polish data centre market is only just catching up with other European markets in terms of installed capacity. All this provides a strong basis for investment growth in this sector. The installed capacity of data centres in Poland is estimated at 310 MW. According to research firm Mordor Intelligence, it’s expected to grow at an average annual rate of around 13 percent to reach 561 MW in 2029.
“Data centres currently have the highest growth potential of all areas of the real estate market in Poland. The market is attracting increasing attention from industry investors, companies specialising in providing services for data centres, and financial investors looking for industries with prospects for fast and stable growth,” says Michał Pietuszko, partner and head of DLA Piper’s Real Estate practice in Warsaw.
DLA Piper’s lawyers point out that the Polish market is still at an early stage of development. Investors building data centres in Poland are usually operators who create infrastructure from the stage of construction plans to commercialisation and management of day-to-day operations. But in the coming years, we can expect to see an increasing number of consolidation transactions, the creation of joint ventures dedicated to large-scale projects and the outsourcing of services related to the management and sale of data centre capacity, as is the case in the more developed Western European markets.
“Online shopping, streaming services, the digitisation of more areas of life and the transfer of data to the cloud are increasing the demand for data centres, points out Maciej Rafałowski, senior associate in DLA Piper’s Real Estate practice. The people we spoke to at Data Center Nation 2024, the largest data centre industry event in Poland, thought that the capacity of Polish data centres could even double within five years. Based on current trends, this scenario seems most likely.”
Progressive market regulation at both national and European levels is posing an increasing challenge to data centre operators. From September 2024, they will have to – under the European Commission’s regulation on the establishment of a common EU data centre assessment system – report key performance indicators, including information on energy consumption, separated heat, types of refrigerants, or inbound and outbound data flows. According to DLA Piper lawyers, some operators may not be technically and organisationally prepared for this reporting.
“From a legal perspective, the data centre market has a lot in common with the real estate market, says Maciej Rafałowski. Similarly, location is a key aspect when considering investment in data centres. Firstly, it determines the possibility of obtaining the necessary connection conditions ensuring the power needed to supply a large-scale data centre. Secondly, local regulations determine the possibility of locating infrastructure in a given place. Finally, location also affects the ability to achieve several technical requirements specific to this class of asset.”
Energy consumption in data centres can be up to 40 times higher than in standard storage buildings. The high water consumption of cooling systems and the heat generated into the environment are also important. The energy efficiency of data centres in Poland is high, with market leaders even sourcing 95 percent of their energy from renewable sources.
“As with other areas of the real estate market, sustainability will be a critical issue for data centres. This is not only about the requirements imposed directly on the data centres themselves, but above all about the obligations of the customers, who, due to both external and internal regulations, have to control environmental factors,” says Anna Bodzioch, senior associate in DLA Piper’s Warsaw Real Estate practice.
