PGIM: Global internet traffic drives growth in demand for data centers

The COVID-19 pandemic has led to mass adoption of technologies, and the resulting increase in global internet traffic and data creation is without precedent, driving growth in demand for data centers, reported PGIM in its Global data centers: getting connected with a niche sector report.

Data centers are still viewed as a niche real estate asset class, but transparency and liquidity are improving as the sector grows. Including corporate acquisitions, total transaction activity averaged $25 billion per year from 2017 to 2019, showing notable growth in capital flows.

The United States is the largest data center market in the world. Total capacity has grown 10 percent per year over the past five years as the market has continued to scale up, though the gradual vacancy uptrend has weighed on rents.

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