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Over the last few years, the need for data centers has increased substantially, largely fueled by the pandemic-inculcated habits and growth of cloud-based technologies. With technological advances, the demand is projected to further grow over the next five years in the global market. In the United States, the ongoing boom in the area of artificial intelligence is currently aiding data center construction activities. Several new projects have been announced across the region, driving construction activities in the sector and the trend is projected to further continue in H2 2023 and H1 2024.
Vantage Data Centers, the Denver-based firm, also proposed a 1.7 million square foot campus in Georgia in August 2023. The three-building project will further add to the fast-growing data center industry in the region, while also supporting the growth of the overall construction market from the short to medium-term perspective. Google, Microsoft, and Switch are among the other companies that have data center facilities in the region.
In Georgia, DataBank also announced that the firm has commenced the construction activities on a data center project, after completing the expansion project in San Deigo, California. The colocation facility in Georgia will feature 200,000 square feet, enabling the firm to further strengthen its position in the data center market. DataBank has three other operational facilities in the Atlanta region with a full build-out of 136,000 square feet.
Prime, another leading data center developer in the United States, announced a new facility in the Phoenix market in May 2023. Acquiring a 66-acre plot in Avondale, Arizona, the company intends to establish a cluster of five data centers spanning 1.3 million square feet, accompanied by a power capacity of 210 megawatts.
Microsoft, the cloud computing giant, is also planning a new data center facility in central Washington. The firm has been increasingly investing in the space of artificial intelligence. The growing interest in the segment is expected to lead to further investment in data center construction projects from the short to medium-term perspective.
These data center construction projects are, therefore, expected to support the growth of the overall construction market in the United States. Based on the estimates of ConsTrack360, the United States construction industry is expected to grow at a compound annual growth rate (CAGR) of 5.2% from 2023 to 2027. During the forecast period, the market will increase from US$1.41 trillion in 2023 and US$1.73 billion by 2027.
The data center construction market is also growing in other regions of the world. The Indian market, especially, has been growing at a rapid pace over the last two years. Domestic as well as global players have increased their investment in the Indian data center market, which is subsequently supporting the growth of the overall construction market.
Indian conglomerates, including Reliance Industries and Adani Group, have also entered into the data center market in India, amid projections of strong growth over the next five years. Global providers like NTT, on the other hand, are forging strategic alliances with domestic developers to develop new facilities in India. In the colocation data center space within India, STT GDC is also making significant strides. In May 2023, the company revealed its commitment to inject a total of US$241.9 million into the development of two fresh data centers situated in Pune, aimed at further strengthening its position in the market.
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