Spanish real estate group Merlin Properties is projecting its data centre business to account for around 40% of its revenue by 2030, driven by the growing demand for artificial intelligence (AI).
Currently, data centres contribute less than 1% to Merlin’s earnings, which are predominantly from offices, shopping malls, and logistics. However, CEO Ismael Clemente believes the division could generate up to 313 million euros in gross rent by the end of the decade.
To expand its data centre portfolio, Merlin recently launched a 1-billion-euro capital increase in July and plans to raise another billion in debt by the first half of 2026 as the company already operates three data centres in Spain and is constructing another in Portugal.
This expansion comes as global appetite for AI continues to fuel the need for data storage and cloud computing infrastructure.
Clemente noted that while Europe lags behind the United States in terms of data centre capacity, with only a third of the U.S.’s installed capacity, European countries are ramping up efforts to bridge the gap. Spain, in particular, is seen as an ideal location for data centres due to its cheap energy, abundant land, and strategic connection to 70% of the world’s data traffic via submarine cables.
However, the CEO also acknowledged the challenges of developing data centres, including the high cost and specialized expertise required. Regulatory hurdles, such as lengthy bureaucratic processes, further complicate projects. Barclays analyst Celine Soo-Huynh highlighted potential delays in securing licenses and the need to import equipment from the U.S., as Europe’s market may not yet be fully prepared to support large-scale data centre growth.
Despite these challenges, Merlin is optimistic about its expansion into the data centre sector, aiming to capitalize on the rising demand driven by AI and other technological advancements. The company joins major players like Amazon and Iberdrola, which have also been investing in data centres in Spain.