Insight

Three big opportunities in data centers now

There’s still value for investors in edge data centers, Tier 2 cities, and in performance improvement.

Phil Wong

Phil Wong

Principal, Advisory, Technology Industry Strategy, KPMG US

Saurabh Gupta

Saurabh Gupta

Director, TMT Strategy, KPMG US

+1 212-872-6787

Tyronne Singh

Tyronne Singh

Partner, Advisory, Financial Due Diligence, KPMG US

+1 212-872-6267

Unlike other commercial real estate assets, data centers rose in value in 2020, as the pandemic increased demand for cloud services and streaming media. There has been brisk M&A activity in the sector and valuations have moved up. But there are still opportunities for investors that focus on three value-producing plays: edge data centers, expansion in underserved Tier 2 cities, and investing in performance improvements for existing portfolio assets. This timely paper shows how to win in data center investing in 2021.