Every email, video call, online purchase and AI query runs through a data centre somewhere. These buildings, packed with servers, cooling and backup power, have become one of the most sought-after infrastructure assets in the world, driven by the shift to cloud computing and, more recently, by the enormous computing demands of artificial intelligence. In the UK, the government designated data centres as Critical National Infrastructure in 2024, putting them alongside energy and water in terms of national importance.

For investors, that combination of essential use and long-term demand is attractive. But data centres are also capital-intensive, technically complex and increasingly constrained by access to power. This guide explains how the sector works and the main ways private investors can get exposure. For the broader category, see our digital infrastructure hub.

How data centres make money

A data centre operator essentially sells space, power and connectivity. There are two main business models:

  • Colocation: the operator rents space, power and cooling to many different customers, who install their own servers. Contracts are often several years long.
  • Hyperscale and build-to-suit: very large facilities are built for, or leased to, a single major cloud or technology company on long-term contracts, sometimes ten years or more.

Revenue is usually measured by the amount of power capacity a customer contracts for, rather than floor space, because power is the real constraint. Long contracts with large, creditworthy tenants can make income highly predictable, which is why data centres are often compared with infrastructure rather than ordinary commercial property.

Why demand has grown so quickly

Three trends have driven demand: businesses moving their computing from their own premises into the cloud, the steady growth of data from streaming and connected devices, and the rapid rise of AI. Training and running large AI models requires dense clusters of specialised chips that use far more power, and generate far more heat, than conventional servers. That has created demand for new, purpose-built facilities and pushed up the value of sites with access to large grid connections.

The ways investors get exposure

Listed companies and investment trusts

The most accessible route is through shares in listed companies that own or operate data centres, or listed infrastructure investment companies holding digital assets such as data centres, fibre networks and communications towers. These trade daily on the stock exchange, so you can buy and sell easily, but share prices move with wider market sentiment and interest rates, not just the performance of the buildings.

Unlisted infrastructure and private equity funds

Much of the investment in new data centres comes from private infrastructure and private equity funds, which develop and own facilities over many years. These funds usually require large minimum commitments and lock capital away for a long term, and access for private individuals is generally limited to those who qualify as sophisticated or high net worth.

Direct and development opportunities

Some unlisted opportunities offer exposure to a specific site or development, through equity or loan notes. These can offer higher target returns, but they concentrate risk in a single project that may not yet have planning consent, a confirmed power connection or a signed tenant.

The risks to understand

  • Power availability: securing large grid connections has become one of the biggest bottlenecks in the UK. A site without a confirmed connection may face long delays.
  • Tenant concentration: income can depend on a very small number of large customers. If one leaves or renegotiates, the impact is significant.
  • Technology change: data centres need regular investment to keep up with new cooling and power requirements. Older facilities can become less competitive.
  • Interest rates: infrastructure valuations are sensitive to interest rates, and higher rates can reduce what investors are willing to pay for long-term income.
  • Development risk: projects still being built carry construction, planning and cost overrun risk that operating assets do not.
  • Liquidity: unlisted investments can be impossible to exit for years.

Data centres and sustainability

Data centres use a great deal of electricity and, often, water for cooling. Operators are increasingly signing long-term deals to buy renewable power, and some new sites are being located next to solar, wind or battery storage projects. This is one reason the sector increasingly overlaps with green energy investment, and why energy efficiency is now an important part of assessing a facility's long-term value.

What to check before investing

  • Whether the opportunity is listed or unlisted, and what that means for your ability to exit.
  • Whether the facility is operating with contracted tenants, or still in development.
  • Who the tenants are, how long their contracts run, and how much income depends on each.
  • Whether grid power is secured, and for how much capacity.
  • The experience of the operator or developer, and their track record of delivering projects.

Our guide on how to compare alternative investment providers sets out further questions to ask any provider.

This article is general information only and does not constitute financial advice. Infrastructure investments can fall as well as rise in value, unlisted opportunities are illiquid, and past demand is no guarantee of future returns. If you are unsure whether any form of alternative investment is right for you, seek independent advice from an FCA-authorised financial adviser.