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Digital Infrastructure’s Expansive DestinyDigitalInfrastructure’sExpansiveDestiny

Infrastructure growth is inescapable amid outsized data center demand.

WHAT FUELS THE GROWTH OF DIGITAL DEMAND?

Emanating from every aspect of our increasingly digital lives, data can provide invaluable business insights on everything from customer behavior to process optimization. Still, existing infrastructure is not keeping up with the data being produced, meaning most data-derived opportunities remain untapped. Closing the gap between data generated and the ability to leverage it is a priority that promises to foster robust demand for digital infrastructure for years to come.

 

DATA CENTERS ARE KEY TO UNLOCKING GROWTH

As the world is becoming increasingly digital, data is being generated at an explosive pace and is forecast to increase four-fold from 2020 levels by 2025. The rapid growth is intensifying the demand for data centers, which are the physical backbone of the internet and ultimately facilitating our digital lives. They are large industrial buildings constructed to house racks of computer servers that store data and connect internet traffic.

Once seen as a niche segment within the real estate sector, data centers are evolving into a mainstream growth industry for the overall real estate industry as they sit at a critical intersection of real estate, infrastructure, and technological advancements like AI. This is driving strong growth in the space, with the global colocation data center market expected to grow at a compound annual growth rate of 11.3% through to 2026. 

Data Decoded: The Case for Data Centers
Alternatives

Data Decoded: The Case for Data Centers

May 14, 2024

Today’s data-driven world has propelled the rapid rise in data creation and the need for data centers.

Data Center Growth Abound In The Digital Age
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Data Center Growth Abound In The Digital Age

Mar 12, 2024

PGIM Real Estate explains how big catalysts, such as generative AI, are creating structural tailwinds for data center growth.

The Digital Value Chain
Alternatives

The Digital Value Chain

May 8, 2024

A massive infrastructure upgrade cycle is underway to support artificial intelligence (AI) growth.

Data Center Demand Growth: Driving Unprecedented Opportunities
Real Assets

Data Center Demand Growth: Driving Unprecedented Opportunities

Jun 6, 2023

PGIM Real Estate discusses how expanding demand and constrained supply create exciting opportunities for data center investments.

* 1 zettabyte = 1 trillion gigabytes, which is equivalent to 250 billion DVDs​

1 Source: Statista, as of November 16, 2023.​

2 Source: 5 Interesting Facts about Data Analytics, BLUE OCEAN LAB as of February 20, 2023.​

The views expressed herein are those of PGIM investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute an offer to sell or a solicitation to buy any security. ​

Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information, nor do we make any express or implied warranties or representations as to the completeness or accuracy. Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, subject to significant revision, and may change materially as economic and market conditions change. ​

​This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional. ​

​Investment products are distributed by Prudential Investment Management Services LLC, member FINRA and SIPC. PGIM Investments is a registered investment advisor and investment manager to all PGIM U.S. open-end investment companies. PGIM Quantitative Solutions, Jennison Associates and PGIM are registered investment advisors and Prudential Financial companies. PGIM Quantitative Solutions is the primary business name of PGIM Quantitative Solutions LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate are units of PGIM.​

© 2025 Prudential Financial, Inc. and its related entities. PGIM Custom Harvest, Jennison Associates, Jennison, PGIM Real Estate, PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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© 2025 Prudential Financial, Inc. and its related entities. Jennison Associates, PGIM Real Estate, PGIM Custom Harvest, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

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