The recent Hyperscalers Convergence Africa conference underscored the growing global interest in data centers as a key asset class, with transaction sizes now reaching up to 300 MW. A report by Linklaters highlights that data centers account for 40% of the target investment for over 50 global real estate funds. Of the $50 billion earmarked for real estate investments across all sectors, $20 billion is dedicated to data centers alone.
This surge is driven by the digital transformation of economies, particularly the adoption of AI and the rising demand for cloud services, presenting opportunities for developers, investors, and fund managers. David Martin, partner and co-head of Linklaters’ digital infrastructure, noted, “Our data needs are higher than ever, leading to global data center development across Europe, the U.S., Asia, and the Middle East. This sector offers exciting opportunities for both private and public markets. We expect private equity and financial sponsors to continue driving much of the sector’s activity.”
Traditionally focused on shopping malls and office buildings, the real estate sector is shifting towards digital infrastructure. Jack Shand, Managing Associate at Linklaters, emphasized, “Long-standing real estate investors are moving into the data center space, leveraging their expertise in construction and development, and access to landbanks where space is scarce.”
However, Shand also acknowledged the challenges. “Data centers are highly technical, requiring partnerships with experienced operators. Tenants, including global hyperscalers and smaller companies, have unique demands.”
Ross Schloeffel, Energy & Infrastructure Partner, highlighted the appeal of data centers to financiers: “With rapid data consumption growth, data centers offer stable, long-term returns, especially with highly creditworthy hyperscale contracts.”
Linklaters has played a key role in major data center deals, such as Brookfield’s acquisition of the Data4 site from AXA Investment Managers and EXA Infrastructure’s sale of seven Edge data centers. It’s clear that data centers are no longer a niche investment—they are now central to global real estate strategies.
