![Catarina Branco](https://worx.pt/wp-content/uploads/IMG_9522-1-254x300.webp)
The growing digital transformation driven by the proliferation of the Internet of Things (IoT), the massive adoption of Artificial Intelligence (AI) and the demand for streaming services, translates into a progressive global dependence on data-based services and, consequently, unprecedented needs for storing and processing them.
Artificial intelligence is the epitome of the digital economy boom, a market currently valued at 184 billion dollars and estimated to quadruple to 826 billion dollars by 2030, according to data from Statista. According to data from the International Data Corporation (IDC), the global volume of data generated in 2025 is expected to reach 175 zettabytes, representing a substantial increase on the 45 zettabytes recorded in 2019.
This data explosion is expected to create enormous pressure on data storage needs, i.e. data centers, which already have low availability rates in traditional European markets, resulting in a proliferation of demand for secondary markets.
Indeed, as the digital economy continues to expand, data centers increasingly represent a robust and strategic investment, with enormous potential for growth in the near future in Portugal too.
This potential stems not only from the pressure of demand, but also from the very attractiveness of this type of asset compared to other assets in the real estate market, since they provide an opportunity for portfolio diversification, offer stable and long-term returns, and also benefit from greater resilience to periods of uncertainty, such as the covid-19 pandemic, compared to other segments. In fact, the growing dependence on digital services and these types of solutions reinforces the importance of this asset class, making them relatively safe investments in times of crisis.
Given the potential of this market, Portugal has the opportunity here to position itself as a preferred destination for investment in data centres, capitalizing on its competitive advantages in this segment, namely its geographical location which favours its connectivity to other countries and continents, its advanced technological infrastructure with high-speed fibre optic networks, as well as access to renewable energy and a highly qualified workforce, especially in the areas of information technology and engineering, which are crucial for the operation and maintenance of data centres.
The attractiveness of the Portuguese market in this context should be further cemented by the four new submarine cable connections planned for the coming years, one of which will be ready for operation as early as 2024, and which should consist of another connection to the African continent.
In 2025, the Medusa Submarine Cable System is also expected to come into operation, connecting the different countries bordering the Mediterranean Sea over a length of approximately 8,700 km. Finally, Google’s Cloud cable is expected to connect Portugal to the United States of America in 2026.
This dynamic is also reflected in investment in data centers, with 39 data centers currently in the pipeline and five more, most of which are located in Greater Lisbon. The largest project under development is a complex of more than 22,000 square meters (m²) in Vila Franca de Xira, developed by Merlin Properties, which is scheduled to start construction this year.
Opinion article by Catarina Branco, Research Analyst at Worx, published in Magazine Imobiliário on July 22, 2024.