Table of Contents

1. The Rise of Data Centers: A Global Demand Surge
The digital era has driven an unprecedented demand for data storage, processing power, and fast connectivity. Every digital interaction—from streaming services to online shopping—relies on data centers to manage, store, and deliver data. According to industry reports, global demand for data center capacity is expected to grow by nearly 10% annually over the next five years, fueled by trends such as:
- Cloud Computing: Businesses and consumers alike are moving their operations to the cloud, creating an insatiable need for reliable, scalable data storage. Companies such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are expanding rapidly, driving the demand for data centers across the globe.
- Artificial Intelligence and Machine Learning: AI-driven applications require massive amounts of computing power, and data centers are essential for processing the vast datasets needed to train and deploy machine learning algorithms.
- Internet of Things (IoT): The proliferation of IoT devices, from smart homes to connected vehicles, requires massive data management capabilities, leading to higher demand for data centers capable of handling real-time processing and connectivity.
As these trends continue, industrial real estate developers and investors are increasingly eyeing opportunities in the data center sector, which is now considered a critical component of the digital economy.
2. Key Considerations for Developing or Leasing Data Centers
Data centers require a specialized real estate approach due to their unique operational needs. Unlike traditional industrial properties, data centers demand a higher degree of technical expertise and infrastructure to meet the expectations of modern digital services.
2.1 Power and Energy Requirements
Energy availability and capacity are among the most important factors when selecting or developing a data center site. Data centers are energy-intensive operations, with requirements for constant power supply and redundancy systems to ensure uninterrupted service.
- High Power Demand: The average data center consumes vast amounts of electricity to power servers, cooling systems, and backup infrastructure. On average, data centers use between 10 to 50 times more energy per square foot than a typical commercial building. This makes proximity to reliable energy grids a key factor in site selection.
- Redundancy and Backup Power: Uninterrupted operations are critical for data centers. Most facilities rely on dual power sources, on-site backup generators, and uninterruptible power supplies (UPS) to prevent downtime in the event of a power failure.
Key Takeaway: Developers must focus on sites with robust energy infrastructure, while also incorporating backup power solutions to guarantee continuous uptime. Data center tenants expect maximum reliability, making power redundancy a non-negotiable requirement.
2.2 Cooling and Temperature Control
Data centers generate an enormous amount of heat due to the high concentration of servers and IT equipment operating within them. Effective cooling systems are critical to maintaining optimal performance and preventing equipment failures.
- Advanced Cooling Systems: Traditional air conditioning systems are insufficient for large-scale data centers. Instead, data centers employ specialized cooling systems, such as liquid cooling, air-side economizers, and water-cooled chillers to manage heat efficiently. These systems ensure the data center remains operational even under peak loads.
- Environmental Impact: Cooling systems consume a significant amount of energy, making them a major factor in the overall energy efficiency of the facility. Developers and operators are now looking for more sustainable cooling technologies to reduce energy consumption and environmental impact.
Key Takeaway: When developing or selecting a data center property, focus on locations that can support advanced cooling infrastructure, with an emphasis on energy-efficient solutions to manage operational costs and sustainability goals.
2.3 Location and Connectivity
The location of a data center is crucial, not only because of its proximity to energy sources but also due to its access to fiber-optic networks and major internet exchanges. Data centers require high-speed, low-latency connections to manage the rapid transfer of large data volumes across the globe.
- Proximity to Network Infrastructure: Data centers must be located near fiber-optic cable networks and key data exchange hubs to ensure fast, reliable data transfer. Proximity to telecom providers is also essential to ensure connectivity between data centers and end-users.
- Geographic Considerations: Some regions are more attractive for data centers due to their climate (cooler climates can reduce cooling costs) or protection against natural disasters. Data centers often seek locations with minimal risk of flooding, earthquakes, and other environmental hazards that could impact operations.
Key Takeaway: Choosing the right location for a data center is a balance between power availability, connectivity, and geographic stability. Proximity to fiber networks and safe, low-risk environments will play a pivotal role in a data center's long-term success.

1. The Rise of Data Centers: A Global Demand Surge
The digital era has driven an unprecedented demand for data storage, processing power, and fast connectivity. Every digital interaction—from streaming services to online shopping—relies on data centers to manage, store, and deliver data. According to industry reports, global demand for data center capacity is expected to grow by nearly 10% annually over the next five years, fueled by trends such as:
- Cloud Computing: Businesses and consumers alike are moving their operations to the cloud, creating an insatiable need for reliable, scalable data storage. Companies such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are expanding rapidly, driving the demand for data centers across the globe.
- Artificial Intelligence and Machine Learning: AI-driven applications require massive amounts of computing power, and data centers are essential for processing the vast datasets needed to train and deploy machine learning algorithms.
- Internet of Things (IoT): The proliferation of IoT devices, from smart homes to connected vehicles, requires massive data management capabilities, leading to higher demand for data centers capable of handling real-time processing and connectivity.
As these trends continue, industrial real estate developers and investors are increasingly eyeing opportunities in the data center sector, which is now considered a critical component of the digital economy.
2. Key Considerations for Developing or Leasing Data Centers
Data centers require a specialized real estate approach due to their unique operational needs. Unlike traditional industrial properties, data centers demand a higher degree of technical expertise and infrastructure to meet the expectations of modern digital services.
2.1 Power and Energy Requirements
Energy availability and capacity are among the most important factors when selecting or developing a data center site. Data centers are energy-intensive operations, with requirements for constant power supply and redundancy systems to ensure uninterrupted service.
- High Power Demand: The average data center consumes vast amounts of electricity to power servers, cooling systems, and backup infrastructure. On average, data centers use between 10 to 50 times more energy per square foot than a typical commercial building. This makes proximity to reliable energy grids a key factor in site selection.
- Redundancy and Backup Power: Uninterrupted operations are critical for data centers. Most facilities rely on dual power sources, on-site backup generators, and uninterruptible power supplies (UPS) to prevent downtime in the event of a power failure.
Key Takeaway: Developers must focus on sites with robust energy infrastructure, while also incorporating backup power solutions to guarantee continuous uptime. Data center tenants expect maximum reliability, making power redundancy a non-negotiable requirement.
2.2 Cooling and Temperature Control
Data centers generate an enormous amount of heat due to the high concentration of servers and IT equipment operating within them. Effective cooling systems are critical to maintaining optimal performance and preventing equipment failures.
- Advanced Cooling Systems: Traditional air conditioning systems are insufficient for large-scale data centers. Instead, data centers employ specialized cooling systems, such as liquid cooling, air-side economizers, and water-cooled chillers to manage heat efficiently. These systems ensure the data center remains operational even under peak loads.
- Environmental Impact: Cooling systems consume a significant amount of energy, making them a major factor in the overall energy efficiency of the facility. Developers and operators are now looking for more sustainable cooling technologies to reduce energy consumption and environmental impact.
Key Takeaway: When developing or selecting a data center property, focus on locations that can support advanced cooling infrastructure, with an emphasis on energy-efficient solutions to manage operational costs and sustainability goals.
2.3 Location and Connectivity
The location of a data center is crucial, not only because of its proximity to energy sources but also due to its access to fiber-optic networks and major internet exchanges. Data centers require high-speed, low-latency connections to manage the rapid transfer of large data volumes across the globe.
- Proximity to Network Infrastructure: Data centers must be located near fiber-optic cable networks and key data exchange hubs to ensure fast, reliable data transfer. Proximity to telecom providers is also essential to ensure connectivity between data centers and end-users.
- Geographic Considerations: Some regions are more attractive for data centers due to their climate (cooler climates can reduce cooling costs) or protection against natural disasters. Data centers often seek locations with minimal risk of flooding, earthquakes, and other environmental hazards that could impact operations.
Key Takeaway: Choosing the right location for a data center is a balance between power availability, connectivity, and geographic stability. Proximity to fiber networks and safe, low-risk environments will play a pivotal role in a data center's long-term success.

1. The Rise of Data Centers: A Global Demand Surge
The digital era has driven an unprecedented demand for data storage, processing power, and fast connectivity. Every digital interaction—from streaming services to online shopping—relies on data centers to manage, store, and deliver data. According to industry reports, global demand for data center capacity is expected to grow by nearly 10% annually over the next five years, fueled by trends such as:
- Cloud Computing: Businesses and consumers alike are moving their operations to the cloud, creating an insatiable need for reliable, scalable data storage. Companies such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are expanding rapidly, driving the demand for data centers across the globe.
- Artificial Intelligence and Machine Learning: AI-driven applications require massive amounts of computing power, and data centers are essential for processing the vast datasets needed to train and deploy machine learning algorithms.
- Internet of Things (IoT): The proliferation of IoT devices, from smart homes to connected vehicles, requires massive data management capabilities, leading to higher demand for data centers capable of handling real-time processing and connectivity.
As these trends continue, industrial real estate developers and investors are increasingly eyeing opportunities in the data center sector, which is now considered a critical component of the digital economy.
2. Key Considerations for Developing or Leasing Data Centers
Data centers require a specialized real estate approach due to their unique operational needs. Unlike traditional industrial properties, data centers demand a higher degree of technical expertise and infrastructure to meet the expectations of modern digital services.
2.1 Power and Energy Requirements
Energy availability and capacity are among the most important factors when selecting or developing a data center site. Data centers are energy-intensive operations, with requirements for constant power supply and redundancy systems to ensure uninterrupted service.
- High Power Demand: The average data center consumes vast amounts of electricity to power servers, cooling systems, and backup infrastructure. On average, data centers use between 10 to 50 times more energy per square foot than a typical commercial building. This makes proximity to reliable energy grids a key factor in site selection.
- Redundancy and Backup Power: Uninterrupted operations are critical for data centers. Most facilities rely on dual power sources, on-site backup generators, and uninterruptible power supplies (UPS) to prevent downtime in the event of a power failure.
Key Takeaway: Developers must focus on sites with robust energy infrastructure, while also incorporating backup power solutions to guarantee continuous uptime. Data center tenants expect maximum reliability, making power redundancy a non-negotiable requirement.
2.2 Cooling and Temperature Control
Data centers generate an enormous amount of heat due to the high concentration of servers and IT equipment operating within them. Effective cooling systems are critical to maintaining optimal performance and preventing equipment failures.
- Advanced Cooling Systems: Traditional air conditioning systems are insufficient for large-scale data centers. Instead, data centers employ specialized cooling systems, such as liquid cooling, air-side economizers, and water-cooled chillers to manage heat efficiently. These systems ensure the data center remains operational even under peak loads.
- Environmental Impact: Cooling systems consume a significant amount of energy, making them a major factor in the overall energy efficiency of the facility. Developers and operators are now looking for more sustainable cooling technologies to reduce energy consumption and environmental impact.
Key Takeaway: When developing or selecting a data center property, focus on locations that can support advanced cooling infrastructure, with an emphasis on energy-efficient solutions to manage operational costs and sustainability goals.
2.3 Location and Connectivity
The location of a data center is crucial, not only because of its proximity to energy sources but also due to its access to fiber-optic networks and major internet exchanges. Data centers require high-speed, low-latency connections to manage the rapid transfer of large data volumes across the globe.
- Proximity to Network Infrastructure: Data centers must be located near fiber-optic cable networks and key data exchange hubs to ensure fast, reliable data transfer. Proximity to telecom providers is also essential to ensure connectivity between data centers and end-users.
- Geographic Considerations: Some regions are more attractive for data centers due to their climate (cooler climates can reduce cooling costs) or protection against natural disasters. Data centers often seek locations with minimal risk of flooding, earthquakes, and other environmental hazards that could impact operations.
Key Takeaway: Choosing the right location for a data center is a balance between power availability, connectivity, and geographic stability. Proximity to fiber networks and safe, low-risk environments will play a pivotal role in a data center's long-term success.

1. The Rise of Data Centers: A Global Demand Surge
The digital era has driven an unprecedented demand for data storage, processing power, and fast connectivity. Every digital interaction—from streaming services to online shopping—relies on data centers to manage, store, and deliver data. According to industry reports, global demand for data center capacity is expected to grow by nearly 10% annually over the next five years, fueled by trends such as:
- Cloud Computing: Businesses and consumers alike are moving their operations to the cloud, creating an insatiable need for reliable, scalable data storage. Companies such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are expanding rapidly, driving the demand for data centers across the globe.
- Artificial Intelligence and Machine Learning: AI-driven applications require massive amounts of computing power, and data centers are essential for processing the vast datasets needed to train and deploy machine learning algorithms.
- Internet of Things (IoT): The proliferation of IoT devices, from smart homes to connected vehicles, requires massive data management capabilities, leading to higher demand for data centers capable of handling real-time processing and connectivity.
As these trends continue, industrial real estate developers and investors are increasingly eyeing opportunities in the data center sector, which is now considered a critical component of the digital economy.
2. Key Considerations for Developing or Leasing Data Centers
Data centers require a specialized real estate approach due to their unique operational needs. Unlike traditional industrial properties, data centers demand a higher degree of technical expertise and infrastructure to meet the expectations of modern digital services.
2.1 Power and Energy Requirements
Energy availability and capacity are among the most important factors when selecting or developing a data center site. Data centers are energy-intensive operations, with requirements for constant power supply and redundancy systems to ensure uninterrupted service.
- High Power Demand: The average data center consumes vast amounts of electricity to power servers, cooling systems, and backup infrastructure. On average, data centers use between 10 to 50 times more energy per square foot than a typical commercial building. This makes proximity to reliable energy grids a key factor in site selection.
- Redundancy and Backup Power: Uninterrupted operations are critical for data centers. Most facilities rely on dual power sources, on-site backup generators, and uninterruptible power supplies (UPS) to prevent downtime in the event of a power failure.
Key Takeaway: Developers must focus on sites with robust energy infrastructure, while also incorporating backup power solutions to guarantee continuous uptime. Data center tenants expect maximum reliability, making power redundancy a non-negotiable requirement.
2.2 Cooling and Temperature Control
Data centers generate an enormous amount of heat due to the high concentration of servers and IT equipment operating within them. Effective cooling systems are critical to maintaining optimal performance and preventing equipment failures.
- Advanced Cooling Systems: Traditional air conditioning systems are insufficient for large-scale data centers. Instead, data centers employ specialized cooling systems, such as liquid cooling, air-side economizers, and water-cooled chillers to manage heat efficiently. These systems ensure the data center remains operational even under peak loads.
- Environmental Impact: Cooling systems consume a significant amount of energy, making them a major factor in the overall energy efficiency of the facility. Developers and operators are now looking for more sustainable cooling technologies to reduce energy consumption and environmental impact.
Key Takeaway: When developing or selecting a data center property, focus on locations that can support advanced cooling infrastructure, with an emphasis on energy-efficient solutions to manage operational costs and sustainability goals.
2.3 Location and Connectivity
The location of a data center is crucial, not only because of its proximity to energy sources but also due to its access to fiber-optic networks and major internet exchanges. Data centers require high-speed, low-latency connections to manage the rapid transfer of large data volumes across the globe.
- Proximity to Network Infrastructure: Data centers must be located near fiber-optic cable networks and key data exchange hubs to ensure fast, reliable data transfer. Proximity to telecom providers is also essential to ensure connectivity between data centers and end-users.
- Geographic Considerations: Some regions are more attractive for data centers due to their climate (cooler climates can reduce cooling costs) or protection against natural disasters. Data centers often seek locations with minimal risk of flooding, earthquakes, and other environmental hazards that could impact operations.
Key Takeaway: Choosing the right location for a data center is a balance between power availability, connectivity, and geographic stability. Proximity to fiber networks and safe, low-risk environments will play a pivotal role in a data center's long-term success.