Welcome to the year of European data centre ABS.
Yondr doubled size of the sponsor base in a single swoop last week. Its debut deal, backed by two data centres in Slough, is up for pricing next week.
Since Vantage priced the first deal in 2024, there has been speculation about when the market would step up to match its US cousin.
GlobalCapital’s Review 2025 | Outlook 2026 special report lays out why whether Europe can finance the demand for data centres will be a defining test of its ambition of building a savings and investments union.
Others have also opined on the matter, like Huw van Steenis who wrote for the Financial Times in January that ‘Europe’s AI ambitions are running into a markets plumbing problem’.
But you don't have to be an AI believer to see the need for more European data centres.
Having compute available close to major cities, as in the case of all the European deals so far, is different to the remote AI training data centres that van Steenis’ headline seems to conjure.
Demand for both is increasing, but the risks and incentives for the operators and investors are not quite the same. AI training is less about speed and more about cheap power. Those facilities are harder to re-let than a cloud computing data centre close to a major urban hub.
Recent swings in the equities market show investors’ uncertainty on AI. There's a significant equity upside, but arguably Alphabet’s 100 year raise this week shows a frothiness in the debt market that hard nosed structured credit investors should treat with caution.
The data centres backing the ABS deals in Europe so far are a step removed from AI roller coaster and the ABS market does now appear set for a significant acceleration.
Vantage priced another deal and a tap on its first deal last year. GlobalCapital understands there are at least two more transactions in the works for this year. Some sources have predicted as many as six deals this year.
There are other constraints on data centre development beyond the financial – crucially Europe simply has less than the US of the stabilised, cashflow generating data centres that you need for securitization.
But more and more are going to come online in the next few years - Yondr's were only finished in December 2024 and May 2025. Can Europe’s securitization market match up?
