TRENDING investors and can be designed to combine elements and concepts from both private equity for the highgrowth phase and infrastructure funds for lower-risk , income-generating assets .
“ As the sector ’ s growth , driven by evolving technology and the global AI boom , continues to fuel investment , we can expect to see more appetite from fund managers and record amounts of private capital earmarked for the sector ,” Jennings added .
David Martin , Partner and Co-Head of Linklaters ’ Digital Infrastructure offering , said : “ Our data needs are higher than ever and as a result we are seeing data centres being developed on an increasingly global scale , from Europe to the US , Asia and the Middle East . The sector presents exciting opportunities for both the private and public markets in terms of equity investment .
“ A crucial consideration is ensuring a clear exit strategy and whether we start seeing public market listings , alongside more traditional exit routes such as asset sales , will be an interesting trend to watch . As data
As data centre projects mature and we see more players getting involved and progressively innovative financing and investment opportunities , we expect private equity and financial sponsors to continue to be a driving force behind much of the sector ’ s activity .
centre projects mature and we see more players getting involved and progressively innovative financing and investment opportunities , we expect private equity and financial sponsors to continue to be a driving force behind much of the sector ’ s activity ,” added Martin .
“ As our research clearly shows , the growing demand for digital infrastructure presents an exciting opportunity for both investors and fund managers ,” said Ben Jennings , Investment Funds Partner . “ In response , we ’ re seeing fund structures that are tailored to accommodate the specific needs of data centre investments , such as higher upfront capital requirements and longer investment periods . Hybrid fund structures that balance development and operational phases can appeal to a broader range of
Ross Schloeffel , Energy & Infrastructure Partner , said : “ Driven by the rapid growth in data consumption , the financing of data centres has become increasingly appealing to a range of different finance providers . Data centre projects offer stable , long-term returns , particularly where supported by highly creditworthy hyperscale customer contracts . The debt products available to support the significant capital requirements of data centre platforms are expanding .
“ While more traditional project or real estate financing structures will continue to be appropriate for some sponsors , we ’ re seeing a shift toward highly flexible ‘ infrastructure ’ debt packages across the European market . For stabilised data centre assets , securitisation structures are also set to become more common as an option to refinance shorter-term bank debt ,” added Schloefell .
Jack Shand , Managing Associate , Real Estate , said : “ Long-standing real estate investors and developers are increasingly seeking exposure to the sector . Traditional property stalwarts bring expertise in construction and development , and many have access to extensive landbanks to help unlock data centre developments where land supply is constrained . However , data centres present unique challenges . Operations are often highly technical and specialised , requiring expertise either in-house or through joint ventures with experienced operators .
“ Data centre tenants and occupiers are also different : from global hyperscalers with exacting requirements to young companies with untested covenant strengths . Investor exit strategies should be considered from the outset , ideally including flexibility for asset disposals or co-investment models . As investment platforms evolve , consideration should be given to bifurcating development and stabilised assets to rationalise operations and maximise investment and debt opportunities ,” Shand added .
Linklaters is at the cutting edge of the digital infrastructure sector and the remit of the team has widened as the market has grown to incorporate a growing number of digital infrastructure assets ,
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