AI Boom Fuels Record Data Center Leasing as Hyperscalers Expand to New Global Markets

AI Hyperscalers Push Data Center Leasing to New Heights in Early 2025

Data center leasing surged to record levels in the first quarter of 2025, driven by soaring demand from hyperscalers and cloud providers amid the global AI boom. According to CBRE's recent Global Data Center Trends report, vacancy rates hit a historic low of 6.6% worldwide, dropping 2.1 percentage points year-over-year as top tech companies compete fiercely for capacity.

With leading hubs facing power constraints, many large users have expanded into secondary markets such as Richmond, Virginia; Santiago, Chile; and Mumbai, India. This shift reflects a broader trend of diversification as operators seek locations with available infrastructure.

North America Leads in Construction and Tightest Vacancy

North America experienced a 43% year-over-year increase in data center inventory, marking the most aggressive expansion globally. Northern Virginia remains the largest market, while Atlanta and Phoenix have risen to second and third places, surpassing Dallas and Silicon Valley. The region's vacancy rate plummeted to 2.3%, the lowest worldwide.

Europe's vacancy rate also reached a record low at 7.4%, with Latin America at 8.8%. Meanwhile, Asia-Pacific faced challenges from land and power shortages, maintaining an average vacancy of 14%. Singapore stands out with a 2% vacancy rate, driven by strict regulations and strong demand.

"Legacy markets face mounting power constraints, prompting hyperscalers to diversify workloads into regions with faster power delivery," noted industry experts. "The focus is shifting from latency to scalable power availability."

Leasing Activity Doubles in North America as Rental Rates Rise

Net absorption in North America reached 1,668.5 megawatts (MW) over the past year, doubling the previous year's figure thanks to hyperscaler expansion and improved power infrastructure. Europe followed with 300.4 MW, marking its second-highest absorption total. Latin America’s leasing activity grew to 99.9 MW in Q1, up from 73.3 MW a year earlier, though energy restrictions limited growth in cities like Querétaro and Bogotá.

In Asia-Pacific, Tokyo led leasing activity with 49.8 MW, while Sydney, Melbourne, and Johor (Malaysia) are poised for AI-driven growth. Rental rates increased across North America and Europe due to limited supply and rising construction costs. However, Santiago and São Paulo saw rental declines amid increased availability, whereas power-scarce markets like Querétaro experienced rent hikes. Pricing in Asia-Pacific remained mostly stable.

Emerging Data Center Hotspots Gain Momentum

New data center hubs are gaining traction thanks to available power, fiber connectivity, and fresh construction projects. In North America, Des Moines and Richmond are attracting significant attention. Brussels and Zurich are emerging strong in Europe, while Rio de Janeiro, Fortaleza, Mumbai, and Seoul are becoming notable contenders in Latin America and Asia-Pacific.

The shifting landscape highlights how energy bottlenecks and AI demand are reshaping global digital infrastructure deployment strategies.

• Key takeaways for Real Estate and Construction professionals:
• Focus on secondary and emerging markets as prime locations for new data center developments.
• Plan for power infrastructure constraints and anticipate premium pricing in core markets.
• Understand regional differences in vacancy and rental rates to optimize investment and leasing decisions.

For those interested in how AI is influencing infrastructure and construction sectors, exploring specialized training can provide valuable insights. Resources like Complete AI Training's latest courses offer practical knowledge tailored for professionals navigating this evolving landscape.