Publications

- October 1, 2021: Vol. 15, Number 9

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On the way up: Data centres are fast emerging as a standalone asset class

by Indraneel Karlekar

As an emerging asset class, there exists an inherent imbalance between the supply and demand of data centres that is catching the eye of institutional capital.

Sitting on the cusp between real estate and infrastructure, data centres share many of the attributes of a traditional real estate investment. Although technically more complex, the components of a data centre are somewhat akin to a modern office building or manufacturing facility, with backup generators and massive heating and cooling equipment. The triple-net-lease structure that is common to data centres is also attractive, delegating responsibility for managing the technical components and operating costs to occupiers, while allowing the investor to concentrate on the asset management.

Despite its youth, the data centre market is suffi

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