CBRE Identifies Data Centres as Attractive New Asset Class for Investors

New report explains key criteria for locating a data centre

Tokyo, November 16, 2017 - ​Investors are displaying a growing interest in data centres as a new asset class for real estate investment. With expected yields falling for almost all real estate asset types in Japan, investors are being drawn to the relatively high data centre yields, according to Big Data, Bigger Yields, a report published today by CBRE Research. The report focuses on key points when choosing the location of a data centre, and also discusses strategies for securing such sites.

Major findings include:

  • Investors are displaying a growing interest in data centres as a new asset class for real estate investment. With yields falling for almost all real estate asset types in Japan, relatively high yields are one of its attractions.
  • The number of new data centres in Japan has been stagnating and there is a growing sense that there is a shortage of data centres. In addition, recent surveys indicate that real demand for data centres will continue to expand.
  • There are three key criteria when choosing the location for a data centre: (1) power supply availability, (2) network quality, and (3) low natural disaster risk. More specifically, a site well suited to data centre would: have the availability of super-high voltage of at least 60,000V; be within a 50km radius of city central; and be in a region with low natural disaster risk. In Japan, the considerable time taken to secure power supply is a bottleneck in establishing sites for data centre usage.

This report follows Data Centres: Bringing the Cloud Back to Earth, which was published in February this year. Please refer to the previous report for insights into data centre business models in Japan and the primary factors when considering data centers as a real estate investment class.

To download both report “Big Data, Bigger Yields” and “Data Centres: Bringing the Cloud Back to Earth”, please click on the link below.

http://www.cbre.co.jp/EN/research/Pages/Special-Reports-ViewPoints.aspx?redirect=true

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Big Data, Bigger Yields

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