A converging set of factors make repurposing of real estate assets as data centres an attractive proposition – a process that requires multi-disciplinary expertise and management.
A glut of available office space due to the shift towards remote working, poses one of the unprecedented challenges to the commercial real estate sector in the wake of the global pandemic. This has prompted companies to reassess their portfolios, seeking innovative solutions to optimise their assets. Simultaneously, the demand for robust data centres capable of supporting increasing IT workloads is rising rapidly.
A Strategic Shift in Commercial Real Estate Utilisation
One compelling strategy emerging from this scenario is the re-purposing of real estate assets into data centres. This approach holds potential for revitalising underutilised properties with the added benefit of addressing the growing demand for data processing and storage facilities.
Countries like the UK and Spain face not only a decreased demand for commercial spaces, but also challenges around securing electricity supply for new build. This has made the adaptation of existing buildings for data centres an increasingly attractive proposition because this approach:
- circumvents the lengthy process of obtaining electrical supply and licenses for new constructions.
- leverages existing infrastructure to meet the immediate needs and short timelines of data centre operators.
Natural Synergy Between Real Estate & Data Centres
Behind this repurposing drive towards is the real estate sector, eager to find profitable uses for their assets, and data centre owners in search of efficient, strategically located yet ready-to-use facilities. At Deerns we connect and enable understanding between these two sectors, creating win-win solutions for all involved.
The concept of EDGE data centres, which are smaller, modular, and situated closer to end-users, aligns perfectly with the characteristics of many commercial properties. These facilities can effectively fill the gaps in power and space requirements, presenting a viable solution for both sectors.
However, the transition from office spaces to data centres has its own challenges. This is why conducting a thorough technical due diligence to assess the feasibility of such conversions is so important. Deerns has initiated partnerships with architects, structural engineering firms and other professionals to streamline this assessment process. Developing high-level checklists for quick evaluations before proceeding with detailed analyses enables clients to quickly understand the feasibility of a proposed conversion, or additional informed decision making.
Managing the Integration of Supply Chains
The integration of commercial real estate and data centre design, construction and operations requires specialised project and technical management, bringing together two distinct supply chains. Deerns, with its expertise in both sectors, plays a pivotal role in facilitating this integration, ensuring effective stakeholder management, and coordinating the diverse elements of project execution. This includes addressing the unique maintenance and security needs of data centres such as:
- Structural Capacity: The weight that buildings can support is crucial, especially as data processing moves towards heavier GPUs (graphic processing units).
- Ceiling Height Constraints: Spatial limitations can hinder the housing of data centre technology within certain commercial buildings.
- Rapid Market Evolution: Client specifications are constantly changing, requiring flexible and forward-thinking design.
- Security Considerations: Commercial properties and data centres each possess distinct security demands.
- Electrical and Mechanical Capacity: Demand for MEP infrastructure is far higher for DCs than for commercial buildings
Enabling Sustainability
The potential for re-purposed real estate extends beyond the immediate benefits to the involved parties. This process can contribute to the sustainability of urban areas by:
- reusing existing infrastructure and reducing the need for additional construction activities.
- investigating opportunities for heat reuse and therefore energy savings in surrounding communities such as residential developments, office campuses and recreational facilities.
Deerns’ multidisciplinary team, which includes experts in structural engineering, building physics, sustainability, smart building systems and power supply management, is well-equipped to explore and implement these integrated solutions.
Here’s where we bridge the divide
We recently conducted technical due diligence for converting an office building into a data centre in Spain, as well as a feasibility study for retrofitting a floor plate in an office building in the United Kingdom to accommodate a data centre equipped with immersion cooling technology. We are developing various projects based on this experience.
While challenges such as negotiating lease arrangements and adapting to the specific technical requirements of data centres exist, the opportunities for synergy between the real estate and digital infrastructure sectors are vast.
Swift unlocking of synergies
Deerns’ approach to re-purposing projects emphasises the importance of a collaborative effort involving various stakeholders including authorities, other tenants, and specialised service providers. Our strength lies in our comprehensive project management capabilities, network of partnerships, and deep understanding of the requirements and challenges specific to both real estate and data centre projects.
As the demand for data processing and storage continues to grow, re-purposing real estate assets as data centres offers a strategic solution that benefits property owners, data centre operators, and the broader community. Deerns operates in both the real estate and data centres markets – we are able to confidently investigate opportunities and provide expert strategic, design and technical advice. Reach out to us to find out more!
