Real estate demand for data centers strong, but power needs may shorten life cycle

Electricity for generative AI processing among slew of potential considerations for properties

With the flow of information only growing more fundamental as a tentpole to modern commerce and society, real estate demand in the data center sector continues to sizzle. But as the use of generative artificial intelligence (AI) becomes more and more prevalent, the burdens brought about by the new technology may push data center properties toward obsolescence faster than previously planned.

That’s according to JLL, which noted that generative AI requires massive amounts of electricity. New data centers risk becoming obsolete rapidly because of the growing power needed to deal with expanding quantities of data, which is predicted to double in the next five years compared to the last decade, per Statista. It’s a pivotal time for data center properties to keep up.

“Technology is evolving fast, which means data center design and operations must adapt, too,” says Hanayyah Sutton, head of data center projects and development services for Europe, the Middle East and Africa at JLL. “Given projects can take two to three years to come online, a clear understanding of future demand type and target customer is key to delivering fit-for-purpose facilities.”

Power densities for data center properties are expanding fast to support the advanced needs of AI. JLL is anticipating data center rack density to grow from 36 kilowatts to 50 kilowatts per rack by 2027. For properties dedicated to training artificial intelligence, that could grow to as much as 80-100 kilowatts – which would also require changes to how units are cooled, as well as other concerns.

“Higher density implies heavier racks, which effects floorplate loads and footprint, while increased heat generation is resulting in a shift away from traditional air cooling towards various types of liquid cooling,” said Jordi Sinfreu, JLL’s head of data centers for southern Europe. “Plus hyperscale, edge and AI all require different mechanical, electrical and design considerations.”

These are important considerations with more and more companies actively searching for more data center space. Net absorption for primary data center markets in North America surged from 1.74 gigawatts to 3.45 gigawatts last year, per JLL.


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