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Big Data boom leads to a new property investment class

A new paper from Colliers International explains how the proliferation of internet data usage, coupled with a growing data centre (DC) services market, is creating a new property investment class.

“Data centres have emerged as a property investment class in their own right, off the back of soaring internet data usage and a data centre services market that is growing at an annual rate of 12%,” said Kevin Burman, National Director of Technology Solutions at Colliers International. 

“Historically, a number of industrial property funds and Real Estate Investment Trusts (REITs) have held limited data centre assets within their portfolios.”

“However, the specialist nature of these properties has seen the formation of national and global REITs that invest solely in data centres.”  

Financial institutions are among the drivers of demand for new DC space, with players such as CBA, ANZ and NAB all completing DC consolidation programs in recent years. Another trend that has emerged within Australia is big corporates increasingly moving their technology infrastructure to offsite external purpose built facilities.

“Over the past five years $3 billion has been invested in data centre infrastructure in Australia alone, with a further $2.4 billion already announced in construction projects leading up to 2020. Of that $5.4 billion a growing proportion has been committed to funded by REITs.”

Commercial property providers are beginning to incorporate workplace technology services into their offering to prepare for this emerging trend. 

Colliers International has a dedicated Technology Solutions team which has delivered IT transformation projects for many of Australia’s largest institutions and international corporations, including Charter Hall, a big four bank and a retail giant.  Most recently Technology Solutions successfully relocated insurance broker JLT Australia’s national core infrastructure from its Sydney office to an external purpose-built data centre in Alexandria.

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