Porto and Malaga are emerging as two of Europe’s most promising locations for the next wave of data centre development, according to a study by Savills, which highlights the growing importance of power availability, land and planning capacity as artificial intelligence drives demand for digital infrastructure.
The two Iberian cities rank fifth and 11th respectively in Savills’ Power and Place Index, which benchmarks 54 global markets according to the physical and development conditions that determine how readily new data centres can be delivered. The index focuses on feasibility rather than current demand, pointing to locations where capacity can be built as constraints intensify in established hubs.
Porto is the highest-ranked Southern European market in the index, behind Oslo, Dallas, Atlanta and Stockholm. Malaga follows in 11th place, while Marseille ranks eighth. According to Savills, the three Southern European cities combine comparatively lower-cost power with more permissive planning environments and less competing demand than some established data centre hubs.
For Porto, the combination of renewable power, strong connectivity and greater scope to secure land and capacity is particularly attractive. Savills says the city illustrates how smaller markets can move from peripheral locations to strategic positions on the data centre map as developers increasingly prioritise access to power.
The findings reinforce the changing geography of Europe’s data centre sector. Savills notes that power, particularly access to the grid, has become the primary constraint on development, with connection lead times in some markets now exceeding construction timelines. As AI workloads become increasingly power-intensive, energy costs are also becoming a key factor in determining where projects are commercially viable.
The study also identifies the Nordic markets as particularly well positioned for AI-related development, with Oslo ranking first, Stockholm third and Helsinki sixth. These locations benefit from abundant renewable power, relatively low electricity costs, cooler climates and, in several cases, less constrained grids and supportive planning policies.
For Iberia, Porto and Malaga’s strong positions suggest that the next phase of data centre expansion may increasingly favour locations outside Europe’s traditional hubs, where securing significant power capacity and land can be more challenging.
Savills’ analysis also highlights the wider implications of this shift. As data centre demand grows, developers, utilities, governments and local communities will need to balance new infrastructure with pressure on electricity grids, water resources, land and the environment. At the same time, well-planned development can support grid investment, renewable energy demand and local employment.
Spain is also tightening the regulatory framework for data centre development. The Government has proposed new sustainability requirements for facilities above 1 MW, including a requirement to cover at least 80% of hourly electricity consumption with renewable generation, alongside the highest European standards for energy and water efficiency. The move comes as data centre projects have secured more than 12 GW of grid access and connection capacity in Spain since 2021, several times above the level envisaged under the country’s AI strategy for 2030.
