Portugal has a strategic position to attract more investment in Data Centers

Portugal has a strategic position to attract more investment in Data Centers

Demand for data centers is at record levels after the pandemic, and markets considered secondary will concentrate the greatest growth in this supply in 2021, according to Savills.

According to the consultant, the largest Data Center markets are currently Frankfurt, London, Amsterdam, or Paris, but secondary markets are growing, such as Spain, Portugal, Italy, Poland or Switzerland. And the demand is expected to continue in the coming years.

Portugal meets the criteria necessary to install Data Centers, a market that needs scale, flexibility and efficiency, in addition to the possibility of expansion, connectivity and security. Our country is attractive due to the coverage and speed of the internet, the security of the country, the good diplomatic relations, it has good fiber optic connections, and it is one of the biggest producers of solar energy.

But, for now, it has obsolete Data Centers and few operators. Most of the 8 existing assets are occupied by their owners. There are 4 projects in pipeline, namely one by Davidson Kempner with 90 MW in Sines, one by Merlin Properties with 20 MW in Azambuja, another in the Port of Leixões, and yet another by FCT, in Guimarães.

According to Scott Newcombe, Head of EMEA Data Centers at Savills, who was speaking in a webinar on the subject of the consultant, among the challenges of this market are the availability of electricity, the "speed to market” and the needs of energy density, in addition to proximity of submarine cables. Portugal even has new submarine cable connections, which is "very interesting for cloud, gaming or streaming companies", according to the official.

Connection to Africa is one of the attractions

In the debate moderated by Savills on the subject, André Rodrigues, from Cisco, considered that Portugal is well positioned in the Data Centers market, but that «it could be better. We have the talent, infrastructure and connectivity to manage assets, and we can only benefit from this demand. We are at a good time to continue bringing Data Centers to Portugal». He emphasizes that "we have a great opportunity to reach the African market, a market that is growing".

Paulo Teles, from Colt, agrees that the country has the necessary conditions, and believes that «the example of Sines can be replicated in other parts of the country. We can bring more submarine cables to Portugal and build more Data Centers».

Alberto Passos, from IP Telecom, has no doubts that «we are in an excellent position to establish connections with Africa and South America», recalling that «with submarine cables, often come Data Centers. Portugal is very well positioned to have these new connections, and could be the gateway to these continents. These are regions that will need many Data Centers, and we hope that many of them will be located in Portugal».

On the other hand, João Fonseca, from Lusorede, highlighted as points in favor of Portuguese geography the moderate climate, namely in terms of energy: «we are able to have a data center that takes advantage of the cool nights for cooling technologies». On the other hand, «the cost of land is not as high as in other countries, and we have a low risk of natural disasters, as well as good accessibility. We have a strategic geographic position», he concludes.

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