Real estate alternatives continue to capture investor attention
In 2021, occupier demand reached a record high, led by large cloud and tech company expansions.
Real estate alternatives continue to capture investor attention and this week we wanted to highlight JLL’s recent report on the Global Data Centre Outlook. In 2021, occupier demand reached a record high, led by large cloud and tech company expansions.
ESG themes are very relevant for the data centre sector. Major multinational companies across industries are striving to meet and exceed ESG goals outlined in annual sustainability reports. As a result, data centre operators are in a position where they must complete their own targets, while helping customers exceed theirs.
There are various metrics that operators are using to track factors like data centre power consumption, carbon emissions and electronic waste. PPA (Power Purchase Agreements), REC (Renewable Energy Certification) and CCA (Community Choice Aggregation) are popular methods for data centre operators to enhance their renewable energy portfolios and lower their carbon footprint.
A number of capital sources are seeking exposure to real estate with strong ESG credentials. These assets will be viewed as more defensive moving forward as they experience lower vacancy, high retention rates and shorter leasing up periods relative to assets with inferior ESG credentials.