Tag Archives: Cushman & Wakefield

Global data centre markets are seeing surging demand due to relentless growth and expansion of cloud computing and AI workloads according to a new report.

The Cushman & Wakefield 2025 Global Data Centre Market Comparison report ranks Johannesburg as the continent’s leading data centre market and places it in the top 10 emerging markets globally.

The report, which benchmarks 97 global markets across 20 strategic criteria from power availability and land pricing to fibre connectivity and regulatory stability, highlights Johannesburg’s maturity and momentum.

Nairobi and Lagos also earned distinction as rising contenders with notable strengths in renewable energy integration and climate resilience.

“While cloud data centres have a well-defined tried-and-tested model and demand remains strong, there’s a growing realisation that AI data centres differ significantly in design, demanding far more power and cooling capacity,” said Calvin Crick, director of Cushman & Wakefield | BROLL Transaction Services.

“The ideal scale of these facilities is still being bedded down, and with development timelines stretching up to four years, global players are being more cautious in their investments.”

In the broader context, Africa is still considered a nascent region for large-scale data centre growth, but its relevance is increasing.

While South Africa clearly leads the continent, Cushman & Wakefield | BROLL is also seeing increased activity in other regional hubs. Nairobi offers a sustainability edge and Lagos presents latent potential.

Favourable macro trends for these African cities include power pipeline diversification, regulatory openness and land availability with lower acquisition costs compared to North America and Europe.

Locally, existing colocation providers, which rent space within their data centres for other companies to house servers and computing equipment, have moved swiftly to expand capacity, particularly in Johannesburg’s East Rand and Samrand nodes.

These areas have become preferred destinations due to their access to power and absence of key locational risks specific to data centres.

Angus Murray, of Cushman & Wakefield | BROLL Transaction Services, said: “The colocation market in South Africa has grown steadily, with ample space now available for hyperscalers to lease without the need for greenfield development. We expect it to take time for that capacity to be fully absorbed.”

“Interestingly, in Cape Town, which is South Africa’s second significant data centre market, we’re seeing land banking activity, which is a sign that shrewd data centre players are positioning for the future and securing sector-specific prime locations for tomorrow’s demand and dynamics now,” Murray said.

Both experts stress that data centre site selection is governed by power availability rather than location alone.

Crick said: “It’s not about finding premium land, it’s about finding power-connected land that meets a matrix of data centre-specific criteria, which includes low flood risk, minimal surrounding residential exposure, multiple access points, fibre connectivity and proximity to major electrical substations. Power delivery costs often exceed land values. The greater the distance from a major substation, the greater the costs. So, it’s important to understand all the nuances when establishing the viability of each potential data centre site.”

Johannesburg stands out as Africa’s most mature data centre hub. It is the only African city included in the report’s emerging markets rankings top 10, coming in at number 10 globally, which underscores its growing relevance as a digital infrastructure gateway into sub-Saharan Africa.

Key indicators driving Johannesburg’s inclusion include its preleased capacity, with over 50% of its pipeline already committed, suggesting healthy demand from hyperscalers and regional enterprises.

It is also one of the few African markets with ≥20MW of power availability in a single facility, placing it on par with major international markets such as Warsaw and Chicago.

The city has a track record of resilience demonstrating strategic planning, ranking among cities that have successfully built data centres outside high-risk flood zones.

John McWilliams, Head of Data Center Insights, Cushman & Wakefield, said: “The industry experienced rapid expansion throughout the past year, a trend we expect to continue into 2025 and 2026. Artificial intelligence (AI) and machine learning (ML), which gained prominence in 2022, are key drivers of this demand now and into the future.”

Global Key Trends

Land Demand and Suburban Shift: Larger site acquisitions for phased campus developments are becoming the norm, pushing data centre projects away from urban cores and into suburban and rural areas. Virginia, Phoenix, and Sydney rank among the top markets for land availability, as developers prioritize locations that support scalability and power integration.
Record Pipeline Growth: The Americas lead in planned data centre capacity, with Virginia boasting a staggering 15.4GW in its development pipeline. Land values remain a top consideration in mature markets, driving greater attention to more cost-effective emerging locations.
Powered Land Becomes Gold Standard: Land with pre-secured utility commitments is in high demand, with developers and even non-traditional buyers like electric vehicle and chip manufacturers competing for sites. These parcels offer a guaranteed path to power amid rising power constraints and long utility lead times.
Investment Surges Across Real Estate Spectrum: The sector continues to attract significant institutional investment, with a sharp rise in joint ventures, mergers, and acquisition activity across colocation, hyperscale, and infrastructure outfits. Recently capitalized firms are increasingly targeting both established and emerging markets, fuelling rapid pipeline growth and positioning data centers as one of the fastest-growing real estate asset classes globally.
Land Pricing and Competition Intensify: While the Americas enjoy lower land costs overall, increased competition in top-tier markets has driven pricing upward.

Click here to download the full report.

Cushman & Wakefield | BROLL forecasts the end of the long-running ‘tenant market’ cycle as office property demand-supply dynamics shift in favour of landlords.

The global commercial real estate services firm expects an increase in office real estate transactions, driven by solidified hybrid work policies, tenant-led office design changes, and the resurgence of new developments in select locations.

In addition to positive sentiment spurred by South Africa’s new Government of National Unity and the early impact of lowering interest rates, a major driver for the office property market is the growing clarity on the evolving nature of work.

Many businesses have adapted to new operational models, supporting effective corporate real estate strategies and boosting decision-making confidence. These developments enhance the attractiveness of real estate investment, despite challenges like slow GDP growth.

Cushman & Wakefield | BROLL’s Capital Markets division predicts that 2025 will be a pivotal year for the sector, as strategic property portfolio rebalancing takes centre stage.

Key players will likely seek to divest non-core assets, recycle capital to strengthen balance sheets, and focus on core strategies.

This shift is largely driven by high loan-to-value ratios (LTVs) in listed and unlisted property funds, elevated interest rates, and squeezed EBITDA margins, according to Thabo Mofokeng, dealmaker at Cushman & Wakefield | BROLL’s Capital Markets division.

“Even with the possibility of further interest rate cuts, these factors are prompting a renewed focus on investment strategies. This has led to a clean-out of non-strategic assets, creating opportunities for buyers with strong liquidity profiles,” Mofokeng said.

“As interest rates decrease, the appetite for deals is expected to rise, which is an exciting development.”

However, a potential challenge lies in the mismatch between buyer and seller expectations. “Sellers asking for premiums above book value could dampen buyer interest, especially among those looking to unlock value from investments,” he added.

Cushman & Wakefield | BROLL’s Transaction Services Division anticipates significant shifts in office market dynamics for 2025, with hybrid work models solidifying as a defining trend, according to Calvin Crick, MD of the division. The resurgence of the office market and the evolving nature of office environments are exciting prospects.

“Firmer hybrid work policies should stabilise office occupancy, providing a clearer, more consistent demand profile that allows for strategic office space management,” Crick said.

Supporting this stability, many companies have realized that in-person collaboration creates stronger culture and better execution, prompting them to reassess workspace strategies. As a result, companies are rethinking how they use office space to enhance collaboration and productivity.

While employee office occupancy rates have risen, they are still lower than five years ago. However, competing with the flexible work-from-home model remains a challenge when retaining talent. “To address this, companies must create appealing office environments that support roles requiring in-office presence, aligning these spaces with organizational needs,” Crick noted.

“A well-defined hybrid strategy paired with the right real estate and workplace solutions is critical for operational efficiency.”

This shift will lead to a strategic re-evaluation of the workspace.

“We expect a rise in demand for commercial office space in 2025,” said Angus Murray of Cushman & Wakefield | BROLL Transaction Services. “This will likely result in lower office vacancies, potential real rental growth, and a shift towards market equilibrium, ending the tenants’ market that has dominated in recent years. It could even spark new office developments in areas where demand exceeds supply.”

Though it may be too early to see clear evidence of the change in office demand-supply dynamics, numerous indicators suggest it is on the horizon. Key factors like the return to office work and evolving workplace designs are fuelling office demand.

At the same time, South Africa’s improved political stability, the suspension of load shedding, and lower interest rates are providing a favourable environment for businesses to execute real estate strategies.