Lisbon alone has nearly quadrupled its projected capacity, while execution and access to the power grid are becoming increasingly critical for the sector’s next phase of growth.

Growing interest

According to Colliers’ latest Data Centres “Iberian Region Snapshot – October 2025 to March 2026” report, Portugal is drawing growing interest as a digital infrastructure hub, driven by strong international connectivity and a pipeline of major investment projects.

Lisbon is emerging as the country’s main growth engine. The city now has 1,389 MW of planned IT capacity — a sharp increase from the 373 MW recorded just a year ago. Operational supply also rose from 20 MW to 25 MW following the launch of the first AtlasEdge data centre in Lisbon, known as LIS001.

Boost to the market

The biggest boost to the market, however, comes from Merlin Edged, which announced plans to build up to 1,300 MW of IT capacity in the Lisbon region. The platform is positioning itself as a potential host for one of the European Union’s future AI gigafactories, in partnership with the Portuguese Government. The company already has 80 MW under construction, expected to become operational by the fourth quarter of 2027, with a further 100 MW already secured.

Other international operators are also expanding their presence in Portugal. AtlasEdge secured €253 million in green financing to expand its Lisbon campus to 30 MW, while Digital Realty entered the Portuguese market through the acquisition of a 2.4 MW facility in Carcavelos, close to major submarine cable landing stations, with operations expected to begin in 2027.

Serious option

“Lisbon is no longer being viewed simply as an emerging market — it is increasingly seen as a serious option for large-scale digital infrastructure in Europe,” said Gonzalo Martín, Managing Director and Head of Data Centres Capital Markets, EMEA at Colliers. “Strong international connectivity, political backing and the scale of projects being announced are putting the city firmly on the map for hyperscalers and AI-driven platforms.”

Geographic position

Portugal’s appeal is also being reinforced by its strategic geographic position and one of Europe’s strongest submarine cable ecosystems, connecting the Iberian Peninsula with North America, Africa and Asia. Combined with growing demand for AI-ready infrastructure, this connectivity is helping integrate Portugal more deeply into global digital networks.

The report also notes that execution capability and access to energy are becoming defining factors for future growth. Earlier this year, Portugal introduced a new regulatory framework for grid access in high-demand areas, replacing the traditional “first-come, first-served” model with a more structured and competitive process. While this creates higher barriers to entry, it is expected to favour well-prepared projects and reduce speculative developments.

“The data centre market is no longer defined only by demand, but by the ability to execute,” said José María Guilleuma, Managing Director of Data Centres at Colliers Iberia. “Portugal has many of the structural characteristics investors are looking for today, but the next phase of growth will depend on how efficiently projects move forward within the new regulatory and energy frameworks.”

Rapid development

According to Pedro Valente, Managing Director at Colliers Portugal, the rapid development of the sector reflects a broader shift in international investors' view of the country.

“Portugal is no longer seen as an alternative market, but as a strategic location for capital seeking scalable, future-ready digital infrastructure,” he said. “The momentum we are seeing reflects not only a strong pipeline of projects, but also a growing alignment between investment, connectivity and institutional commitment.”