Converting constraints into alpha
Opportunity meets momentum in 2026 as data centres importance is growing.
The EMEA region now requires more than GBP422 billion to fund the current development pipeline1.
Data usage continues to compound, leading to further capacity growth (Chart 1), while power remains the binding constraint. Efficiency gains will not offset demand, sustaining strong appetite for credible green Power Purchase Agreements (PPAs) and further favouring platforms with secured grid interconnects and renewable offtake.
Chart 1: Estimated global data centre capacity demand by key driver (Gigawatts of capacity)
Sources: McKinsey (Data centre demands, May 2025)
At the same time supply remains tight in 2026. Regulatory and zoning hurdles, scarce green power and skilled labour gaps will continue to impact delivery timelines. FLAPD hubs remain the most important markets due to high-speed transmission and low latencies for AI inference, coupled with data gravity and labour considerations, while secondaries are advancing due to their value proposition of less restriction and power availability.
The environment is fast paced, and in 2026 we see value creation broadening from AI enablers toward integrators as inference scales and expands the addressable market, which in turn reshapes location considerations. Moreover, deep domain knowledge is decisive as technical obsolescence accelerates, and investors sharpen their focus on more sustainable assets. Rack densities will continue to rise, bringing heavier cabinets and higher floor loads. Older stock comes under pressure as liquid ready cooling and structural capacity increases, reshaping design assumptions and capex profiles. Investors who manage the challenges can capture double digit total returns. Well located, power secure, future proofed assets tend to outperform.
1-Green Street News (8 Oct 2025)
