DPP Director, Helen Marks recently spoke to Property Week about why data centres need a new use class.
The surge in data centre development began during the pandemic, when the nation moved online to work, learn and socialise – and five years on, the hybrid working trend hasn’t diminished.
Add to that the boom in artificial intelligence (AI) and more tech developments in robotics, and the demand for more data capacity is clear to see. Expansion in the sector will continue, according to CBRE’s UK Real Estate Market Outlook 2025, with London leading the way.
But data centres are large buildings and, not surprisingly, the capital has a shortage of power and land, so developers are looking elsewhere to build. One such development is Blackstone’s recently approved £10bn data centre at Cambois near Blyth in Northumberland; spread over 133 acres and 10 buildings, it is a sign of things to come.
Until recently, data centres barely registered in terms of planning. It was only a year ago when that changed, as the updated National Planning Policy Framework (NPPF) explicitly recognised data centres as essential to “building a strong, competitive economy”.
The new NPPF makes it clear that local plans should identify locations for digital infrastructure, including data centres and gigafactories. For the first time, data storage sits alongside manufacturing and logistics as a driver for the UK economy.
The shift didn’t happen by accident. When Labour came to power in 2024, it designated data centres as critical national infrastructure. The government’s AI Action Plan soon followed, promising dedicated “AI growth zones” to accelerate the development of digital infrastructure. More reforms are on the way in the forthcoming Planning and Infrastructure Bill, which includes plans to streamline approvals for major projects and critical infrastructure. The message is clear: the UK needs data centres built, and fast.
The will is there, but the planning system hasn’t quite caught up. The updated NPPF is a start, but data centres don’t fit into existing use classes. At DPP, we have done some research and found most applications are typically classed as B8 (storage and distribution) or sui generis (anything that doesn’t fit elsewhere). Neither is perfect. Putting them in the B8 category could provide problems as an application could be frustrated by a local authority assessing it in the same way as they would for a logistics application, for example considering transport impacts. But deem them sui generis and each application could be treated differently depending on the local authority, leading to more confusion.
Those of us working in the sector agree it’s time for a dedicated data centre use class, giving planners, councils and developers a clear rule around these applications. But until that happens, we just have to do our research and examine how the local planning authority has handled similar applications and agree on the classification early, ideally at the pre-application stage.
Power pinch point
Another significant pinch point is power. Data centres need a constant, resilient, high-voltage energy supply, the availability of which often dictates where they can be placed. Many projects are already being affected by current and future energy supply and demand constraints – the need for more data centres will add to this issue.
To examine grid capacity, the government commissioned a Strategic Spatial Energy Plan, to be published next year, which will map out where energy projects should go, taking into account housing, transport and industry demands. If the plan works, it would revolutionise the sector in the long term, but in the short term, the lack of power capacity is a critical limitation for development in this sector, as there is only so much power to go around now, let alone in the future.
Power will always be an issue as sustainability expectations rise. The next generation of data centres will probably have to look at alternative energy sources as well as heat recovery and sustainable cooling systems to cut their carbon footprint. This push for green data centres will create opportunities for forward-thinking developers and construction firms to differentiate themselves through sustainability expertise and credentials.
For the property and construction sectors, data centres offer the chance to invest, diversify and succeed. These are complex, high-value builds; they are in demand and needed quickly and efficiently. But anyone dipping their toe into this market will have to do their homework, given the distinct requirements of energy infrastructure, security and the UK’s planning system, which is still playing catch-up.
