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60 seconds on why data centres matter for real estate investors

Demand for data from sectors such as the gaming industry and high frequency traders can benefit real estate in global cities.

10/12/2017

Hugo Machin

Hugo Machin

Co-Head of Global Real Estate Securities

We know not all cities are equal. We also know that there are certain cities which in the future are going to be much stronger than others. But, within that, we also think there are elements of real estate sub-sectors that are not created equally either.

One area that we have particular interest in is data centres. Demand for, and the creation of, data is a trend that is growing very strongly. In fact, every two to three years, the amount of data that is produced through new technology is doubling.

This data needs to be housed and transferred through data centres, and these data centres need to be located in and around some of the world’s strongest cities.

We're seeing very strong demand from two industries in particular: the gaming industry and high frequency traders. A reduction in latency and the need to be on super-fibre highways are driving this demand.

Our view as real estate investors is that you need to be positioned in the strongest global cities, but also in very specific sub-sectors in terms of real estate in those global cities.

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.