By Stuart Pinnington, Global Head of Asset Owners
In today’s digital-first economy, data centres have emerged as one of the most critical infrastructure assets. From cloud computing and artificial intelligence (AI) to streaming services and financial transactions, data centres serve as the backbone of global connectivity.
And data centre investments aren’t just the domain of global private equity firms and sovereign wealth funds; they’re also becoming darling assets for family offices. Although infrastructure only makes up 1% of family offices’ alternative allocations currently, almost a quarter of family offices plan to increase their exposure to this asset class over the next five years, according to the 2025 UBS Global Family Office Report.
For all these potential investors, data centres offer compelling opportunities but also complex challenges. Understanding the factors that influence data centre performance, sustainability and resilience is essential for making informed investment decisions. In this article, we outline those key factors that investors must consider before investing into data centres.
1. Market demand and growth drivers
The demand for data centres is accelerating, driven by the exponential rise in data consumption, widespread cloud adoption and the rapid advancement of technologies such as AI and the Internet of Things (IoT). According to ABI Research, the number of operational data centres is projected to grow from over 6,000 by the end of 2025 to 8,378 by 2030. Hyperscale providers including Amazon Web Services, Microsoft Azure and Google Cloud are at the forefront of this expansion, while enterprise and co-location operators continue to scale their infrastructure to meet evolving needs.
When considering a data centre asset, investors should assess:
- Tenant demand: Who are the anchor clients? Are they hyperscalers, enterprises or crypto miners?
- Workload trends: AI and machine learning workloads require high-density computing, influencing cooling and power needs
- Geographic expansion potential: Emerging markets in Africa, Southeast Asia and Latin America are becoming attractive due to rising digital penetration.
2. Energy efficiency and sustainability
Energy consumption remains one of the most critical challenges in data centre operations. With electricity usage expected to more than double, reaching approximately 945 TWh by 2030, facilities require immense power to run servers and maintain cooling systems. As environmental concerns intensify, investors are increasingly focused on evaluating the sustainability credentials of data centres to ensure long-term viability and responsible growth.
Key metrics include:
- Power Usage Effectiveness (PUE): Measures energy efficiency; a PUE close to 1.0 is ideal
- Carbon Usage Effectiveness (CUE): Assesses carbon emissions relative to energy consumption
- Water Usage Effectiveness (WUE): Tracks water use per kilowatt-hour, especially relevant in water-stressed regions
Investors should prioritise facilities that:
- Use renewable energy sources or have long-term power purchase agreements (PPAs)
- Employ innovative cooling technologies, such as liquid cooling or closed-loop systems
- Are data centres located in regions with low carbon intensity and stable energy infrastructure.
3. Infrastructure and design resilience
Data centres must be resilient to physical and operational risks. Climate change has increased the frequency of extreme weather events – floods, wildfires, heatwaves – that can disrupt operations.
Investors should examine:
- Redundancy and uptime guarantees: Tier III or Tier IV facilities offer higher fault tolerance
- Disaster recovery protocols: Backup systems, uninterruptible power supplies (UPS) and on-site generators are essential
- Site selection: Avoid areas prone to natural disasters or water scarcity. Consider elevation, seismic activity and proximity to power grids
Green infrastructure like green roofs, rainwater harvesting and low-carbon construction materials can also enhance resilience and reduce environmental impact.
4. Certifications and ESG reporting
Certifications validate a data centre’s commitment to sustainability and operational excellence. They also influence investor confidence and tenant attraction.
Important certifications include:
- LEED (Leadership in Energy and Environmental Design): Focuses on energy efficiency, air quality and sustainable materials
- BREEAM (Building Research Establishment Environmental Assessment Method): Evaluates environmental performance and resource management
- ISO standards: ISO 9001 (quality), ISO 14001 (environment), ISO 27001 (security)
Environmental, social and governance (ESG) reporting is increasingly vital. Investors should look for transparency in:
- Energy and water usage
- Waste management
- Community engagement
- Diversity and governance practices
Facilities with strong ESG profiles are more likely to attract institutional capital and environmentally conscious tenants.
5. Financial performance and risk
While data centres offer stable, long-term returns, they also require significant upfront capital and ongoing operational investment. Investors should conduct thorough financial due diligence.
Consider:
- Lease structures: Triple-net leases vs. managed service agreements
- Occupancy rates and churn: High retention and long-term contracts reduce volatility
- CapEx and OpEx: Cooling upgrades, energy retrofits and equipment refresh cycles can impact margins
- Regulatory risks: Energy pricing, zoning laws and environmental regulations vary by region
Additionally, the rise of edge computing and modular data centres may shift traditional investment models, offering more flexible and scalable options.
6. Technological innovation and future-proofing
The pace of technological change in the data centre industry is rapid. Investors must ensure that facilities are future-proofed to accommodate evolving demands.
Key considerations:
- AI readiness: High-density racks and liquid cooling for AI workloads
- Connectivity: Proximity to fibre networks and internet exchange points (IXPs)
- Automation and monitoring: Smart load management, predictive maintenance and real-time analytics
Facilities that embrace innovation are better positioned to adapt and thrive in a competitive landscape.
Beyond real estate
Investing in data centres is more than a real estate play; it’s a strategic move into infrastructure, sustainability and digital transformation.
The most successful investors will be those who understand the interplay between environmental impact, technological evolution and operational resilience. By prioritising ESG performance, energy efficiency and strategic site selection, asset owners can unlock long-term value while contributing to a more sustainable digital future.
Talk to our experts
If you’re considering data centre investments, our team of real assets experts offers proactive, end-to-end support powered by leading software and a robust data platform.
Whether you’re operating through a corporate or fund structure, we tailor the optimal set-up across multiple jurisdictions. Our experience spans the establishment and administration of:
- Special purpose vehicles (SPVs)
- Partnerships and companies
- Foundations and unit trusts
- Private trust arrangements
- Private and public REITs
- Direct and indirect investment funds
Partner with us to structure your investment for resilience, compliance and long-term growth. Get in touch today.
To read more about data centre sustainability, check out our in-depth whitepaper developed in collaboration with BuildingMinds, Norton Rose Fulbright and the Urban Land Institute.
