There are also opportunities for retail investors.
AirTrunk – which develops and operates large data centre campuses across the Asia Pacific – is believed to be preparing for an IPO, which is expected to be well received. These hyper-scale data centres cater to large tech companies.
A consortium of investors led by Macquarie Group took control of AirTrunk in 2020 when it had a valuation of around $3 billion and just four years later it’s expected to offload the business for as much as $12 billion.
Another option is Australia and New Zealand listed infrastructure investor Infratil, which owns Canberra Data Centres, the largest provider of data centre services to the Australian government. Shares in the company are up more than 20 per cent in the past 12 months.
With no real estate investment trusts at this stage, it’s difficult for investors to gain access to a pure property play.
Data centres are the most capital intensive of the real estate sectors but also provide the highest returns.
They are usually developed with debt funding and often with the backing of an agreement with a corporate customer to occupy the centre once completed. As a result, wholesale investment funds are driving the market for data centre capital.
The huge expense involved in developing a data centre means retail investors won’t be able to develop or directly own a facility, but there are other opportunities.
Data centres can be located just about anywhere so are often placed in regional areas where more land is available. Their locations are usually kept secret due to security.
They are among the most energy and water intensive infrastructure assets – a large data centre can consume as much energy as 50,000 homes, according to the Australian Energy Council.
Operators will come under increased pressure to power them with renewable energy as their customers put more focus on the carbon emissions of their suppliers. Owners of nearby land have an opportunity to develop and operate wind or solar farms to provide them with power.
NextDC, for instance, bills itself as Australia’s leading independent data centre operator and says it has the best energy efficiency ratings in Australia and a NABERS 5-star certification, and more data centre operators will follow its lead.
Wanda Parisien is a computing expert who navigates the vast landscape of hardware and software. With a focus on computer technology, software development, and industry trends, Wanda delivers informative content, tutorials, and analyses to keep readers updated on the latest in the world of computing.
