Data centres make compelling case for investment: Natixis report

Data centres make for a compelling investment case, asserted France-based investment banking company Natixis, backing its argument stating a strong demand for cloud services, high-performance computing (HPC) and AI, combined with high revenue and better cash flow prospects are expected.

The investment banking company expects the data center market to undergo significant structural changes, through the introduction of new business models and new investment profiles. Cloud computing is likely to remain the main driver of expansion for the data center industry. 

A data centre is typically a large group of networked servers used by organisations for the remote storage or distribution of large amounts of data. Data localisation plans are expected to trigger investments in data centres, besides incentives by various states to attract such investments.

"Data centres are a complex and multifaceted asset class, at the crossroads between real estate, energy infrastructure and technology. In our view, it remains primarily the preserve of infrastructure-oriented investors," the investment banking company noted in a report.

Without a more coordinated and effective approach, the report said there are reasons to fear that regulatory pressure will place severe operational constraints on the sector in the years ahead.
The report asserted that they believe that investors can invest in data centres in several ways. 

"The most direct from a real estate point of view is powered land plots, powered shells, fitted out data centres and operators' equity. The choice of approach depends on the investor's skills, as data centres are operational assets that require specific expertise to run efficiently," it added.