“Moving from an analog asset to a digital asset.” This is how Ismael Clemente, the acknowledged CEO of Merlin Properties, described the shift toward data centers. In real estate jargon, these digital bunkers have sparked a fierce competition between large funds and international tech players eager to anchor themselves in a rapidly evolving Spanish market.
The strength of a data center is measured by its power capacity, typically expressed in megawatts. These facilities store hardware that underpins cloud services for companies. Building is only about a third of the total cost; the remainder covers the advanced technology, ongoing maintenance, and the essential infrastructure. They demand robust power connections, efficient cooling, and strong physical and cyber security, given their attractiveness to attackers and the critical nature of their operations.
Spain holds a privileged geographic position and is increasingly viewed as Europe’s gateway. The country hosts key endpoints for submarine cables linking Europe with the Americas, Asia, and Africa, reinforcing its strategic role. Experts predict Spain could become the continent’s lowest-latency hub. Madrid and Barcelona are expected to see expansion rates surpassing 500 percent, reflecting data centers as a growing category within real estate assets. Projections indicate Spain will quadruple its storage capacity within the next three years, with Colliers estimating data center investments could reach 5 billion euros by 2025.
For real estate investors, data centers represent highly innovative assets with significant barriers to entry. Strategic alliances are crucial to successful development, as is securing the right partners, financing, and expertise. Estimated profitability after development often outpaces that of traditional sectors like residential, office, or standard logistics warehouses, with potential returns surpassing 7 percent in favorable conditions.
Madrid and Barcelona
Madrid is already adding about 500 MW of development capacity. Investors are focusing on regional towns such as Alcobendas, Tres Cantos, Las Rozas, Fuenlabrada, Getafe, San Fernando, and Alcalá de Henares. Notable ongoing projects include initiatives associated with a Microsoft-led fund, Thor Equities, and other prominent investors linked to the Spanish financial sector.
Barcelona, historically more modest in appetite, has drawn heightened attention with the arrival of submarine cables. Merlin Properties, American Panattoni, and Catalan Renta Corporación own developments in Zona Franca, Cerdanyola, and L’Hospitalet de Llobregat, respectively. Beyond the two major cities, projects span Extremadura, Castilla-La Mancha, Aragón, and Andalusia. Meta is supported by Ingenostrum and Aire Networks, illustrating a broad national footprint.
Merlin Features
Ibex-35-listed Socimi Merlin Properties has positioned itself firmly in this segment, repurposing portions of unused logistics platforms into high-potential centers. Some parcels previously valued for other uses were transformed into prime data center sites, underscoring a pivot toward modern digital infrastructure.
Current development activity includes four new centers in Madrid, Barcelona, Bilbao, and Lisbon. The company already holds three building permits in Spain and has begun projects in the Basque Country. A strategic alliance with North American Endeavor will advance Merlin’s footprint, aiming for ultra-energy efficiency and net-zero water consumption across its facilities.
Google. Facebook, Amazon and Microsoft
Facebook has signaled a strong intention to establish a large data center in Spain. At a meeting with the national government’s leadership, the firm indicated a 1,000 million euro investment in a new Toledo facility, to be located on land managed by SEPES. The project is planned as a multi-building complex, expanding the country’s cloud ecosystem.
Google is developing a dedicated cybersecurity data center presence in Spain. A facility on the Malaga coast will repurpose a former military building to serve as a data center for the American tech giant, with restoration and adaptation costs estimated in the several-million-euro range.
AWS, the cloud arm of Amazon, is finalizing a major expansion around Zaragoza. The plan includes substantial investments over the next decade and the creation of thousands of local jobs alongside nearby logistics platforms. Microsoft, too, has ongoing projects in Algete, Meco, and San Sebastián de los Reyes, focusing on cloud solutions for Spanish firms and public administrations.