Data Centers may Become New Areas for Real Estate Investment

Investment giant Blackstone Group and data center real estate trust company Digital Realty recently announced that they will jointly create a new joint venture to develop a $7 billion data center, with plans to develop 10 data centers in areas such as Frankfurt, Paris, and Virginia, targeting online content, cloud services, and artificial intelligence providers.

Computing power is a key infrastructure for the development of the digital economy, and the booming development of AI has brought about rapid growth in demand for computing power. According to Grand View Research data, the value of the global data center construction market in 2022 is approximately $213.5 billion. It is expected that by 2030, the global data center construction market will expand to $371.9 billion, growing rapidly at a compound annual growth rate of 7.4%.
The construction of data centers is becoming a new engine for future growth. Blackstone Group has decided to spend $6.7 billion to acquire data center provider QTS in 2021. At present, its valuation has soared to about $20 billion, more than twice that of Blackstone’s acquisition, and is considered one of the most profitable single real estate investments. Joe Zidle, investment strategist at Blackstone, stated that data center construction is similar to warehouses built in the early stages of e-commerce development. Generative AI relies on powerful data processing capabilities and extensive storage capacity, which will bring huge demand for data centers.