Global data center investment more than doubles in value by 2021, study shows

Global data center investment more than doubles in value by 2021, study shows

Energy security is an important issue for top management planning investments. 90% of equity investors, 89% of developers and 85% of financiers are willing to spend more to invest in areas with good energy security.

Global data center investment more than doubles in value by 2021, study shows

According to research Global Data Center Reportthrough the DLA pipeline, Total global infrastructure investment data center More than doubled last year, from $24.4 billion in 2020 to $59.5 billion in 2021. Total transactions data center A 64% increase over the same period, from 69 in 2020 to 117 in 2021according to a report published by DLA Piper titled “The Rapid Rise of the Data Center: The Key Drivers Behind Global Demand”. The report analyzes 100 executives from infrastructure companies, fair and debt provider company and data center developer Globally, after a similar report was published in 2020.

Growth is expected to continue this year, thanks to the following factsAs of June 7, 2022, 41 transactions have been completed for the year amounting to $21.3 billion. This is an increase of more than 100% compared to the same period last year. 45% of developers, 56% of financiers and 67% of equity investors plan to invest in four or more investment projects. data center Over the next 24 months; from 10%, 27% and 37%, respectively, who invested in four or more data center within the past 24 months.This record is searching data center is driven by so-called growth Hyperscale Like Facebook, Google and Microsoft, they are thriving in the transition to services cloudwhich has grown with the pandemic.

Although investing data center Mainly concentrated in the United States (US) and Europe, Asia Pacific (APAC) is expected to be the largest source of growth going forward.Although 70% of respondents believe that data center of the U.S. is overvalued, the country accounts for nearly half of global hyperscale capacity and has the largest portfolio data center. However, 79% of respondents chose China as one of the three countries where they expect investment to grow fastest Next 24 months, followed by India (56%) and the US (54%).This shift towards investment in Asia Pacific can be seen as a result of Hyperscale China, including Alibaba, Tencent and ByteDance.

Energy security is increasingly seen as one of the most important factors affecting invest data center. 90% of equity investors, 89% of developers and 85% of financiers would be willing to spend more to invest in cost-effective locations with good grids. Global gas and electricity prices have soared over the past 12 months, with huge impact on operating costs data center. By region, executives in Asia Pacific are most willing to pay the most for energy security (98%), compared to 82% in Europe and 80% in the US. The reason for Asia Pacific’s willingness to pay more for energy security may be the continued outages in China and India in the second half of 2021.

ESG is another important factor influencing investment data center. Almost all top executives (94%) report reviewing and due diligence Over the past 24 months, concerns around ESG have increased so that 75% of funders and equity investors and 70% of developers are willing to pay more to invest in locations with very strong ESG credentials.

However, the level of commitment to ESG varies by region, with 84% in Europe and 80% in the US willing to pay more for locations with very good or excellent ESG credentials, compared to just 56% in Asia Pacific. The growing importance of ESG in Europe and North America reflects regulatory requirements and industry initiatives such as the Climate Neutral Pact data center, to launch in January 2021.Agreement sets targets for achieving climate neutrality in the European sector data center by 2030.

Commenting on the findings, Anthony Day, global co-president of technology and contracts at DLA Piper, said: “Our report reveals record investment in data centers, fueled by unstoppable growth in hyperscalers and the pandemic-accelerated transition to cloud services. The demand is endless, and so far in 2022 Investment has doubled compared to the same period in 2021. Data centers are energy-intensive facilities, so rising energy prices and supply security issues are playing an increasingly important role in the decision-making process. Where and how these centers should develop. Energy efficient data centers are attractive to customers and easier to market, and if the energy used is also renewable, it becomes a more attractive proposition from an ESG perspective, especially for European and North American For executives.”

DLA Piper Real Estate Partner Alanna Hasek added: “There are differences in attitudes towards ESG issues in Europe and the US, where they have stricter environmental regulations and industry initiatives, and in Asia Pacific. However, this is related to increased interest in expanding into China and India, where environmental standards are It will be less stringent to enforce and monitor. It will be interesting to see if this shift in geography will lead to a shift in industry attitudes about how data centers will evolve in the future.”

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