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The Rising Demand for Land for Data Rooms: Navigating the Infrastructure and Valuation Landscape

In today’s digital age, data centres are emerging as some of the most critical real estate properties. These are the digital factories of the 21st century, quietly running behind the scenes and ensuring our online activities go smoothly — be it watching a video, transferring funds, or browsing the web. However, these enormous warehouses full of computers require space, and that brings us to the question: What does it take to find the right piece of land for such facilities, and how are they valued? Let’s delve deeper.

 

Demand for Land for Data Rooms:

The increasing reliance on cloud computing, big data analytics, and the ever-growing Internet of Things (IoT) has led to an unprecedented demand for data centres. Companies are competing for prime real estate locations that can host these digital warehouses, and this demand is influencing land prices and pushing for infrastructure modifications.

 

Infrastructure Requirements for Data Centres:

 

  • Power Supply: One of the most significant requirements for a data centre is a reliable power supply. The site should be close to major power grids, and the local power infrastructure must be robust enough to handle the massive loads that data centres bring.
  • Cooling Systems: Cooling is essential in data centres, as servers generate a lot of heat. Therefore, the local climate can play a role — cooler locations reduce the costs associated with cooling.
  • Connectivity: A robust telecommunication infrastructure is non-negotiable. The site should be near major network routes to ensure fast and reliable data transmission.
  • Security: Locations that are less prone to natural disasters (floods, earthquakes, tornadoes) are preferred. Furthermore, the area should have low risks of vandalism or other security threats.
  • Accessibility: While it’s not necessary for data centres to be in urban hubs, they should be accessible for maintenance and staff.

Pros and Cons of Developing Land for Data Centres:

Pros:

  • Economic Growth: Data centres can contribute significantly to local economies, creating jobs and increasing the demand for local services.
  • Stable Revenue for Landowners: With tech giants often leasing land for several years, landowners can expect stable, long-term revenue.

Cons:

  • High Initial Investment: Developing the necessary infrastructure for a data centre is capital-intensive.
  • Environmental Concerns: The enormous power consumption and potential e-waste generated by data centres can pose environmental challenges.
  • Land Use Controversy: Large plots reserved for data centres might lead to concerns about better use, especially in areas with housing shortages or agricultural needs.

Valuing Land for Data Centres:

Land valuation for data centres is complex and depends on multiple factors:

Location

Proximity to power grids, telecommunication networks, and cooling sources can increase the value.

Size & Topography

Larger plots that allow for future expansion and ones that require minimal grading or flood protection will naturally fetch a higher value.

Zoning & Permitting

Land pre-zoned for industrial use or those with expedited processes can significantly cut down development timelines.

As the digital age marches, the demand for land to house our vast digital repositories will only increase. While this presents a significant opportunity for landowners and developers, it also necessitates careful planning and consideration of various infrastructural and environmental factors. As with any real estate venture, location, connectivity, and local regulations play pivotal roles in determining the value and feasibility of plots for data centre purposes.

Our team can provide a no-obligation consultation on the best way to unlock the value of your land, so whether its for residential, commercial or any other use, then please get in touch.

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Author: Kevin Ellis

Our company was established in 2014 by Kevin, who previously ran a highly-successful development department for an award-winning property services business. Today, he has grown Thomas Mae into a thriving business, staffed by a trusted team of property consultants who are adept at sharing their knowledge and skills. Kevin’s mission is to foster strategic land investment, to deliver solid, profitable results across the whole of the UK, and to work effectively with both private landowners as well as commercial and institutional landowners.

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