Inside Infrastructure: The Push and Pull of Data Centres

Data takes centre stage 

Driven by the relentless growth of data, cloud computing, and AI, few real asset classes are generating as much interest as data centres. The numbers are staggering –  last week’s announcement of Macquarie’s disposal of Texas-based Aligned Data Centers typifies this as a consortium including BlackRock, GIP, Nvidia, Microsoft and Abu Dhabi fund MGX will pay $40bn to take over what is one of the world’s largest data centre operators. The deal envisages that the investment group will use a $100bn capital pool they have created for investment in data centres and enabling infrastructure.

Beyond this, McKinsey projects as much as $7tn worth of investment will be needed to match worldwide demand by 2030. In 2025 alone, JLL is estimating that $170bn of data centre projects (in asset value) will need to secure permanent financing. Interest is not confined to investors and operators; data centres are also taking political centre-stage, most notably in the $31bn UK-USA “Tech Prosperity Deal” agreed in September which will see investors and technology companies invest heavily in data centres and AI supercomputers.

However, the sector remains in flux - high demands on power grids and planning regulators running up against Europe’s environmental initiatives, the drive for hyperscalers to wield economies of scale across jurisdictions weighed against concerns over data sovereignty, and an influx of foreign direct investment met with mandatory filings under national security regulation.  

As Freshfields is deeply embedded in this space, this week’s Inside Infrastructure brings together collated insights from experts across our practice to keep you up to date on trends that are set to define the data centre sector in 2026 and beyond. 

Defining data centre trends

Power:

• By 2030, Goldman Sachs estimates that global data centre power consumption will rival the current consumption of Portugal, Greece, and the Netherlands, combined.
• With lead times for reliable power connections in key cities such as Frankfurt, London, Amsterdam, and Paris exceeding 7-10 years, developers are exploring emerging markets and countries with shorter grid connection times – winners in recent years being Switzerland, the Nordics and Southern Europe. Power supply bottlenecks have also driven investors to secondary markets which grant access to established assets.
• To secure power, a popular strategy for operators is negotiating Power Purchase Agreements (PPAs). Yet with terms often lasting over a decade, PPAs can prove complex, expensive, and time-consuming to negotiate. 

Planning:

• Across Europe, data centres are increasingly being deemed ‘Critical National Infrastructure’, allowing certain local planning restrictions to be bypassed. Nonetheless, as centres grow in size and impact they are increasingly being captured by planning regulation.
• Since April 2024, new developments in England have been required to illustrate a 10% net biodiversity gain. Starting in April 2026 this will apply to Nationally Significant Infrastructure projects as well.

Financing:

• In financing, a clear bifurcation is emerging in lender positions between development and stabilised assets in terms of risk, return, investor profiles, and debt pricing.
• Data centres with predictable long-term incomes are being structured as ‘yieldcos’ or ‘stablecos’. These allow operators to carve out stabilised income for co-investment or funding while retaining operational control of the data centre business itself (and isolating any development risk).
• Securitisation and asset-backed financing are further adding to competition for stabilised assets. In June 2025, Vantage raised €640m via Europe’s first public ABS offering secured against four German data centres.

Regulatory:                            

• By fDi Intelligence’s estimate, data centres accounted for 12% of global greenfield investment in 2024 (where developers choose to construct new facilities instead of acquiring or scaling existing ones).
• As data centres are increasingly classified as critical infrastructure, in many jurisdictions they are being subject to foreign investment regulation. In almost all European jurisdictions, investments as low as 10% in operating businesses can trigger mandatory filings (although rules vary).
• The regulatory landscape is shifting – for example, the UK’s National Security and Investment (NS&I) regime is to be updated to include third-party data centres. This is expected to bring up to 50 more businesses within the scope of the NS&I mandatory regime.

Hyperscalers: 

• Hyperscalers, such as AWS and Microsoft, are highly sought after tenants, with strong negotiating power. Keen to attract these providers, operators are often willing to accept hyperscalers’ standard contract terms – typically 5-10 years with unilateral renewal options, although longer contracts are becoming more common to align with asset lifespans.
• In addition, or as an alternative to building to own themselves, hyperscalers typically secure data centre capacity through leases or master services agreements. While both offer similar rights and obligations, the choice depends on the hyperscaler’s operational, financial, and strategic priorities.

ESG:

• The EU now requires operators of data centres with an IT demand of 500+ kW to disclose metrics for various sustainability KPIs (e.g., energy use, power demand, water input, waste heat reuse, waste heat temperature). Some member states have also enacted data centre-specific sustainability disclosure requirements (e.g., France, Germany).
• In the UK, data centre operators are eligible as of 1 July 2025 to benefit from a renewed Climate Change Agreements scheme. Those meeting energy efficiency improvement targets and reporting annual energy use and power usage effectiveness, will be eligible for discounts on the Climate Change Levy which is a UK tax on energy use (including a 92% discount on tax on electricity use).

If you would like more detail on any of the points covered above, or to be included in our quarterly data centres market update distribution list (find our Q3 market update here: Data centre quarterly update | Freshfields) please reach out to any of the authors of this piece, or to your usual Freshfields contact, who will be very happy to answer any questions or to connect you to colleagues with relevant experience.

And finally, Real Asset or Fake News?

Well done to those of you who last week correctly identified that unfortunately an environmentally friendly form of steam engine has not yet been invented (in the fictional land of Thomas the Tank Engine or in real life).

With data centre demand being fueled by an exponential rise in AI usage, and new applications emerging every day, can you spot which of the below is the fictional AI use case?

• Art-thentication: Analysing images of paintings, identifying the unique brushstrokes of the Masters to provide a new layer of surety in authentication.
• (Space) Garbage in, (Space) Garbage out: Tracking minuscule fragments of space junk to prevent collisions with satellites and space stations.
• Paradigm-sift: Using AI-powered robotics to sift through mixed waste, identifying material that could be recycled, thereby significantly increasing reusability.
• Search Party: AI-integrated apps that analyse your phone's location history and movement patterns after an item is reported lost, suggesting the most likely locations to search first.
• De-bugging: Using AI plugged into sensitive microphones on crops and soil to learn the unique acoustic signatures of specific pests, allowing for targeted control without harming pollinators.

As always, if you think you know which fact is fiction please reach out – we will publish the answer in next week’s post.