Of EUR 1.2bn in German data centre transaction volume in 2025, just EUR 140m involved completed assets. The rest was land. How the market solved its capital-inflow problem and created an exit problem.
A billion-euro market with almost no tradable stock
Data centres have established themselves as a standalone asset class in Germany that is the good news. According to Colliers, segment transaction volume reached roughly EUR 1.2bn in 2025, around five per cent of the EUR 25.2bn total commercial investment market. For a use type that market reports still filed under “other” five years ago, that is a remarkable ascent.
The bad news is in the composition. Of that EUR 1.2bn, around EUR 1.05bn was land acquired for project development. Standing assets – completed, leased, cash-flow-producing data centres accounted for just EUR 140m, under twelve per cent of the total. A further 62 per cent of all volume traded in the EUR 100–200m ticket range.
Put differently: what is reported as Germany’s “data centre investment market” is overwhelmingly a land market. Investors are not buying income; they are buying options on future income. That is a fundamentally different risk category, and it is systematically understated in the public conversation about record volumes.
The price of a grid connection
The distortion is not caused by weak demand but by scarcity in the one input that cannot be manufactured quickly: electrical connection capacity. JLL analysis puts grid connection times for facilities above 50 MW in the Rhine-Main region at up to 13 years. Lead times for large transformers run to four years.
A plot with a secured grid connection is therefore no longer a plot it is a scarce infrastructure right, and it is priced accordingly. Around Frankfurt, data-centre-suitable land frequently trades between EUR 1,000 and more than EUR 2,000 per square metre, in individual cases up to EUR 3,500. Commercial and logistics land in the same region trades at roughly EUR 350 per square metre a premium of three to ten times.
That premium is economically defensible as long as the connection capacity actually materialises. It ceases to be defensible if a project stalls in the grid queue. For a buyer without a firm connection date, the premium is not infrastructure value but an unhedged bet on the build-out speed of a regulated network operator.
Frankfurt capped, Berlin and the regions accelerating
The market’s geographic answer is already visible. Frankfurt remains Europe’s largest location with around 997 MW of operational IT capacity and absorbed 128 MW in 2025 almost half of the entire FLAP-D take-up of 260 MW – at a vacancy rate of 4.6 per cent. New land, however, is now released only selectively.
Berlin is the clear riser: 136 MW today, with a forecast of up to 853 MW by 2030, a sixfold increase. Stromnetz Berlin intends to nearly double grid capacity from 2.2 to at least 4.1 GW by the mid-2030s and invested some EUR 467m in network infrastructure in 2025 alone. In parallel, the mega-tickets are moving into the regions: Schwarz Group is planning a campus of up to 200 MW in Lübbenau (Brandenburg) with a project value of EUR 11bn; Blackstone around EUR 4bn between Lippetal and Hamm for another 200 MW; maincubes in Nauen an initial 200 MW with scope beyond 400 MW.
Nationally, operational IT capacity stands at around 1.3 GW and is projected to rise to as much as 3.3 GW by 2029. Total installed data centre capacity grew nine per cent in 2025 to 2,980 MW and is expected to double to roughly 5,000 MW by 2030. Bitkom expects the AI share of installed capacity to rise from around 15 to 40 per cent. On 18 March 2026 the federal government adopted a data centre strategy targeting a doubling of capacity and a quadrupling of AI capacity by 2030.
Sovereign capital is arriving mid-market capital is not
On 10 September 2026, during the state visit of Sheikh Mohamed bin Zayed Al Nahyan, Berlin announced a UAE investment package worth EUR 40bn. It includes roughly 1 GW of new data centre capacity, with about EUR 10bn focused on Bavaria, alongside 29 corporate agreements worth more than EUR 9.4bn.
One gigawatt equals roughly three quarters of Germany’s current operational IT capacity. Tickets of that size come from sovereign funds, hyperscalers and global private equity not from conventional real estate capital. This is precisely where the market splits. While multi-billion packages are negotiated politically, smaller and mid-sized operators report that financing for modernisation and expansion is harder to obtain and available only on less favourable terms. For many investors the motivation is less the risk-return profile than regulatory logic: data protection, public-sector requirements, regulated industries and the unique position of DE-CIX in Frankfurt create demand no global provider can ignore.
Market observers place prime yields for stabilised core assets at around four per cent attractive for pension vehicles and infrastructure funds, but effectively untradeable while only EUR 140m of standing stock changes hands per year. Germany currently has a product problem, not a demand problem.
What this means for investors
- Connection capacity is the real due diligence. What matters is not the price per square metre but the contractual quality of the grid commitment: binding connection date, reserved capacity, penalties, transferability. Land at EUR 2,000/sqm with a firm connection is cheaper than land at EUR 900/sqm without one.
- Define the exit before you enter. At EUR 140m of annual standing-asset volume there is no liquid secondary market. Anyone buying land must have modelled the path to a stabilised asset operator covenant, lease structure, forward sale at acquisition.
- Secondary locations offer the better risk-reward. Berlin, Brandenburg, North Rhine-Westphalia and Saxony combine available land with political backing for grid expansion, at land prices well below Rhine-Main levels.
- Treat the energy concept as a value driver, not an operating cost. On-site generation, battery storage (BESS) and direct utility agreements effectively shorten the grid queue and therefore feed directly into valuation.
This intersection of real estate, engineering and energy is exactly where Prime East operates through its dedicated division PE Property Solutions: site and grid connection assessment, technical due diligence, structuring of operator and lease models, and transaction support across Germany and Poland.
Conclusion
Germany’s data centre market is healthy on the capital side and underdeveloped on the product side. Price formation is happening almost entirely at land level, while the standing asset the actual real estate barely trades. Anyone entering today is generally buying a development option whose value hinges on a single variable: the date power starts flowing. Investors who contract for that variable rather than assume it will have a considerably calmer few years than those betting on rising land prices.
Disclaimer: This article is for general information only and does not constitute investment, legal or tax advice. All figures are based on publicly available sources.
Sources
- Konii: Data centres reach around five per cent of commercial transaction volume in 2025 (Colliers)
- Cash.: Data Center – five per cent market share and still growing
- Börsen-Zeitung: Data centres push land prices far above logistics and industrial levels
- JLL: The new geography of the German data centre market
- Haufe: JLL Data Center Report – the AI boom is relocating data centres
- Bitkom: Data centres in Germany – AI drives growth
- KPMG: Data centres in Germany – between billion-euro investment and capital outflow
- Handelsblatt: Why many investors are hesitant to fund data centres
- CNBC: UAE plans $46 billion investment in Germany, with data centers a key focus
- France 24: UAE to invest 40 billion euros in Germany, including for data centres
- CBRE Germany: Data Centres
- Prime East: Germany data center investment market 2026
