Investors need to better understand data centre risk before gaining exposure to the sector, says INREV in a new paper.
In Data centres: navigating a fluid asset class, the industry body warns that data centres carry risks with no real equivalent in traditional property. These include power and grid connectivity; planning constraints; technological change; tenant quality; liquidity and exit risks; sustainability; and potential political or social resistance to development. Assessing a data centre opportunity therefore requires fluency in highly technical areas, such as power markets, grid connections, technical specifications and planning. The inherently hybrid nature of data centres — a mix of real estate, infrastructure and private equity characteristics — complicates matters further, says INREV.
Investors must also note that, whilst they can benefit from the diversification of revenue streams and marginally reduced reliance on hyperscale occupiers, each
