CBRE charts rise of neocloud suppliers inside European colocation market
The European colocation market is plugging the demand gaps for datacentre capability brought on by the waning appetites of hyperscale cloud companies by cozying as much as neocloud suppliers, analysis from CBRE exhibits.
The true property consultancy’s third quarter take a look at the state of the European datacentre market reveals that, regardless of a drop-off in hyperscaler demand for colocation capability, the quantity being acquired for internet hosting synthetic intelligence (AI) workloads has soared.
The supply of this demand are “neocloud” AI-infrastructure suppliers, similar to Nscale and Coreweave, with CBRE’s figures displaying the amount of datacentre capability bought to such entities has trebled over the course of the previous yr.
“The amount of datacentre capability bought to neocloud suppliers within the first 9 months of the yr rose to 414MW, up from 133MW in comparison with the identical timeframe in 2024,” stated the CBRE report.
Whereas the report flagged London as being the placement the place the bulk (68MW) of the 114MW of latest datacentre provide that got here on-line in the course of the third quarter of 2025 was delivered, it additionally confirmed the Nordics as the preferred location for neocloud suppliers to take-up capability.
“Greater than half of the signings’ quantity (57%) is for capability in Nordic nations, similar to Norway and Iceland … [as] regional datacentre suppliers can provide neocloud suppliers … resource-intensive laptop gear, decrease energy prices and accessible capability, which is more and more troublesome to search out in Europe,” stated the report.
Kevin Restivo, director of European datacentre analysis at CBRE, stated energy is usually the best expense for AI infrastructure suppliers, so favouring the Nordics – the place there’s an abundance of lower-cost renewable energy make sense.
“We see super development of this phase particularly within the Nordics [for that reason], the place lower-cost renewable energy is usually accessible in higher abundance than in lots of different European markets,” he stated.
Market issues
The meteoric rise of some neocloud suppliers has raised eyebrows in sure parts of the IT trade, with suppliers similar to Nscale having risen to prominence seemingly in a single day, having secured eye-watering quantities of outdoor funding.
As referenced within the CBRE report, the dearth of historical past and observe file a few of these neocloud suppliers have has not gone unnoticed by the colocation group, with operators taking steps to mitigate the dangers concerned with doing enterprise with them.
“Most European datacentre suppliers are accepting neocloud companies as tenants regardless of their appreciable AI infrastructure necessities and brief operational histories,” stated CBRE. “Datacentre suppliers are taking measures to mitigate the extra threat tackle by leasing capability to neocloud companies. For instance, increased rents are charged to account for the upper threat consumer and to assist get well the appreciable construct prices incurred in constructing AI-ready datacentres. Rental deposits and mum or dad firm ensures are generally requested of neocloud companies too.”
Andrew Jay, head of datacentre options for Europe at CBRE, stated neocloud suppliers are additionally currying favour with colocation firms by “absorbing vacant house that was initially supposed for hyperscalers”. For instance, the CBRE report referenced a case in February 2025 the place a hyperscaler “halted talks” for datacentre capability in Europe, leaving some operators with house to spare.
“It’s a signal that many datacentre suppliers are rising extra comfy with the ambitions of neocloud suppliers and the covenants that include it,” added Jay.
