No one wants to be left behind and miss out on the investment opportunities that artificial intelligence (AI) represents. Beyond Nvidia and the rest of the companies that have joined this project car, There is a closely related sector in which expectations are high and in which experts see another derivative to win with AI without exposing themselves to the best-known technologies. It is that of data centersThe companies behind these physical installations that store the enormous amount of digital data that accumulates every day across the planet are in many cases real estate companies, or what are called in the United States reit (real estate investment trusta vehicle similar to the Spanish SOCIMI dedicated to the rental of real estate). These companies also now have in their favor a monetary policy that will become more flexible with the expected decreases in interest rates.
“Data centers will play a critical role in investors’ portfolios in the years to come. These are critical infrastructures that offer investors a way to capitalize on the growth of AI. as AI platform providers without having to bet on the ultimate winners in AI technology,” John Murray, managing director of Global Private Real Estate at Pimco, and Francois Trausch, CEO and CIO of PIMCO Prime Real Estate, noted in a report this week.
These experts believe that, within the real estate sector, data centers are the segment that enjoys the “best health”. “The demand for AI and cloud services has triggered a global fight for data center capacity (…). The growth shows no signs of slowing down, with tenants renting entire campuses instead of individual buildings. This situation is accentuated by the search for digital sovereignty by governments,” they explain.
The European Commission predicts that the global volume of data will increase by 530% between 2018 and 2025, and Europe is looking for precisely this technological independence. In fact, it is estimated that around 90% of EU data is stored by American companies. The two specialized giants are listed on Wall Street: Equinix And Digital Real Estate Trust. In recent years, there have been many corporate movements in the sector, with listed companies such as QTS or CyrusOne being acquired and delisted from the stock exchange. There are others that, among all their digital services, also offer data centers, such as Iron Mountain.
Options via companies or funds
It is possible to invest directly in these companies, for which investment banks expect gross profit (EBITDA) growth of more than 20% over the next two years, according to estimates collected by FactSet. Equinix is the largest company and the one with the highest upside potential among American companieswith analysts valuing its stock 13% above where it currently trades. And it’s up barely 1% in the stock market this year, compared to Digital Realty’s nearly 10% or Iron Mountain’s 58%. The consensus recommendation from experts is to buy, except for Digital Realty (hold, according to the algorithm used elEconomista.es with FactSet data).
In Spain, there are also real estate companies already listed that are interested in this business. Merlin Properties has invested more than 500 million for 60 MW and is preparing a second phase for another 200 MW. “Data centers are our secret weapon. As soon as they start to open and are 100% operational, the new value will start to be reflected in our books. We now have three data centers open and two more under construction. This is the growth vector of the company and will increase the share price,” said Ismael Clemente, CEO of Merlin, in a recent interview with elEconomista.es. Unlike the big ones reits focused on the data centersMerlin is still trading at a discount to its net asset value (24%), weighed down mainly by the office business despite a rise of almost 15% on the stock market in 2024.
Another way to gain exposure to this activity is through investment funds.. There is no category focused solely on data centers as there are on other topics, but you can consult those that occupy a position at both Equinix and Digital Realty. Among those sold in Spain and with weights greater than 4%, are Robeco Gravis Digital Infrastructure either abrdnII-Global Real Estate Secs Susaccording to Morningstar data. There are also others that have one of the two in their portfolio with relevant weightings, including Equinix: Robeco Sustainable Real Estate Equity, GS Gbl Immobilier EQ, Mediolanum Real Estate Global, AXAWF Global Real Estate, Amundi IS FTSE EPRA NAREIT Global, GVC Gaesco Port. VR Interior Companies either DWS Invest ESG Next Gnrtn Infras. To gain exposure to Merlin through funds, Abante Real Estate Sector And Dividend Mutual Fund They give a significant weight of their portfolio to value (7.08% and 6.47%).
Managers see this as a clear opportunity. “New supply continues to be limited by the lack of energy availability and the shortage of components needed to build data centers. As a result, lessors maintain their favorable position to increase rents on current facilities and increase yields on new developments,” Medilanum’s director stressed in his latest half-yearly report for the fund. Mediolanum Real Estate Globalone of those that has Equinix in its portfolio. “We believe that the reits Data center development presents an attractive opportunity for investors, not only in the short term, but perhaps over the next decade as the sector tends to benefit from the stronger long-term growth drivers offered by the market. reits“, they added.
