Buildings that house corporate servers and back-up facilities in remote locations are vastly emerging as a gold rush property asset. Ironically, whilst the property market is still rife with falling property values, negative equity and repossessions, inside investors and reallionaires are designing their investment strategies around data storage centres acquisition. From an investment stand point, data centre properties have proven to be one of the best performing property assets over the last five years. Evidently, the notion of a property crash is proving to be utter rubbish.
Nevertheless, as traditional property sectors continue to become obsolete, inside investors are adopting certain strategies to help them continue to make millions in cash from real estate investing in the down cycle. Investing in recession proof property sectors is one of many strategies used by sophisticated investors to grow their wealth. To date, there are around 20 real estate assets that are proving to be recession and providing their owners with excellent equity growth, double digit rental yield and superb returns on investment. Sadly, residential, retail, hotel and office properties have not made it into the G20 league.
The reason why data centres are recession proof:
Firstly, the world has rapidly grown in demand for IT services (especially for the internet), coupled with a surging demand for internet content in emerging economies. Whilst there is still considerable room for more IT functions within the public and private sectors, the social-enterprise sector is still a long way behind. The biggest driver of growth is the vast emerging demand for video content from the entertainment industry via the internet. Video-on-demand & webcasting is big business online.
Secondly, the number of internet users has jumped in the last five years from 1.043 billion users (16% of the world’s population, June 2006) to 2.11 billion (30%, June 2011) (source: Internet World Stats).
Thirdly, according to the International Telecommunications Union the number of smart-phones is projected to rise from 500 million in 2011 to 2 billion by 2015. More and more people will be access rich content via smart phones stored on cloud servers.
As inside investors find new ways of developing data storage centres more cost-effectivey, the cost of content storage will drop and the volume of tenants and occupancy rates will double, thus giving owners of data centres real estate steady income streams and positive equity growth for decades to come
