The traditional underwriting toolkit is proving incomplete for data centres. INREV’s new paper, Data centres: navigating a fluid asset class, argues the sector requires a different underwriting discipline, built around power access rather than location.
Data centres are an inherently hybrid investment, combining real estate characteristics with infrastructure features such as critical power. At the platform level, some private equity investors approach the sector as an operating business, seeking to build scale, rather than simply owning individual assets. The sector’s hybridity is a lasting, structural feature, requiring new ways of thinking about risk and value.
Grid connection queues in some European markets now exceed seven years. In Ireland, data centres account for roughly 23 percent of national electricity consumption. Institutional capital nonetheless continues to concentrate in the established FLAP-D markets of Frankfurt, London, Amsterdam, Paris
