Amidst the slowdown within the industrial sector, information facilities are proving to be a vibrant spot. Fueled by the expansion of AI and its immense information storage necessities, demand for information heart house is surging: In line with the newest nationwide industrial report by business actual property itemizing platform CommercialEdge, there was 27.4 million sq. ft of knowledge heart house below building on the finish of February, in addition to one other 33.5 million sq. ft within the planning phases.
Moreover, final 12 months alone, information heart building totaled 14.2 million sq. ft — a rise from the earlier three years’ common of 10 million sq. ft. Moreover, information facilities’ share of total industrial house doubled from a 2% share between 2020 to 2022 to succeed in 4.3% in 2023.
“Whereas acknowledged as a distinct segment subset of the market, it’s a notable alternative in sure markets as basic warehouse/distribution undertaking begins proceed to gradual,” mentioned Peter Kolaczynski, director at CommercialEdge.
That mentioned, energy is a significant component affecting the panorama and improvement areas. Particularly, information facilities require two to 5 occasions extra vitality than a typical cloud server. Furthermore, regardless of established information heart hubs like northern Virginia benefiting from sturdy infrastructure, their capability is presently constrained by the substantial energy calls for of AI workloads.
Information Heart Development Hits Secondary Markets
Consequently, this has led to a shift towards secondary markets with plentiful assets. For instance, Atlanta has 3 million sq. ft of knowledge heart house below building representing 34% of its current inventory and leverages ample land and energy assets to satisfy the rising demand for information facilities. Underscoring this progress, Georgia Energy not too long ago disclosed that whereas industrial manufacturing amenities have important electrical energy wants, information facilities account for 80% of their projected demand.
Thus, efficient collaboration between stakeholders is essential for navigating the dynamic information heart panorama, and Google’s latest $1 billion funding in a Kansas Metropolis information heart (partnered with regional utility Evergy) serves as a main instance. That’s as a result of this partnership ensures entry to the mandatory energy grid infrastructure for the brand new facility.
Accordingly, in secondary markets missing robust public grid infrastructure, various options are rising. One progressive resolution entails small modular reactors (SMRs). This know-how is behind the latest deal between information heart big Equinix and SMR developer Oklo. In a primary for the colocation trade, Equinix pay as you go $25 million to safe as much as 500MW of nuclear vitality from Oklo’s future reactors.
In the meantime, to straight handle the calls for of the AI revolution, Meta is constructing an $800 million information heart in one other key secondary market — Indiana. Situated in Jeffersonville, this facility might be particularly designed to help AI companies. Notably, to deal with the intensive computing wants of AI, the information heart might be geared up with liquid-cooled {hardware}.
