Citi named three "direct beneficiaries" of the rising data center demand: U.S.-listed real estate investment trust Digital Realty Trust, data center firm Equinix, and Australia-listed NextDC. Other beneficiaries include those converting their warehouse assets, such as Singapore-listed Keppel DC REIT, Mapletree Industrial Trust, and CapitaLand India Trust. The bank also suggested that industrial firms might partner more directly with existing data center providers to tap into their supply chain and redevelop warehouses into hyper-scale data centers.
Key takeaways:
- Real estate companies globally are showing strong interest in data centers due to their higher potential returns, according to Citi.
- The push toward data centers is driven by major themes such as artificial intelligence and nearshoring, with large language models requiring significant data center capacity.
- Citi predicts the development and construction of hyper-scale data center capacity will grow significantly over the next 7 years, with demand for data center power expected to expand at a compound annual growth rate in the mid-teens till 2030.
- Three "direct beneficiaries" of rising data center demand are U.S.- listed real estate investment trust Digital Realty Trust, data center firm Equinix and Australia-listed NextDC, according to Citi.