Data Centre Growth Abounds
PGIM Real Estate explains how big catalysts, such as generative AI, are creating structural tailwinds for data centre growth.
Morgan Laughlin Sees a “Generational Opportunity” in Data Centres
Feb 27, 2024
Morgan Laughlin, PGIM Real Estate, recently spoke with Fund Selector Asia about what he considers to be some of the most compelling conditions he has encountered in a real estate investment career spanning decades.
Morgan Laughlin describes the global economy’s glaring need for digital infrastructure expansion as a “generational opportunity for data centres and for investors.” That’s an especially noteworthy take on the situation considering what he does for a living.
Morgan oversees global data centre investing for PGIM Real Estate, and he recently spoke with Fund Selector Asia about what he considers to be some of the most compelling conditions he has encountered in a real estate investment career spanning decades.
Formidable barriers to entry related to building and operating data centres, the mammoth warehouse spaces that house servers and network equipment, restrict the pace of infrastructure supply growth. At the same time, the demand side, driven by an appetite among businesses to glean insights from an ever-growing mountain of data, seems to know no limits.
According to Morgan, the supply-and-demand imbalance promises to transform the category. “Once seen as a niche segment within the real estate sector, data centres are evolving into a mainstream growth industry for the overall real estate industry,” he said.
Key takeaways:
- A pronounced supply-and-demand imbalance underpins standout investment opportunities in the data centre category.
- Hyperscale centres, the large, high-performance facilities that attract top-notch tenants, represent the most compelling segment.
Artificial intelligence (AI), with its enormous computational requirements, only makes the need for data centres capacity more critical.
For more information on the data centre opportunity, access Morgan’s entire interview with Fund Selector Asia.
”Given the huge supply-and-demand imbalance, we find it more compelling to capitalise on the opportunity through direct property-level investments, which often offer much higher return potential…”
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