Hyperscale Public Cloud Data Centre Asset Class Study

This technical report presents a comprehensive analysis of hyperscale public cloud data centres as a premium asset class. It outlines the expected strong organic rent growth and limited customer churn associated with these data centres, driven by several key factors. The report details the critical role of data centre ecosystems in supporting public cloud infrastructure, emphasizing the economic growth they facilitate. It explains the profit incentives for hyperscalers, highlighting the high margins and sticky customer bases that drive continued capacity expansion. Additionally, the report discusses the fixed infrastructure nature of hyperscale public cloud data centres, which presents significant switching costs and risks. It also addresses market conditions and supply constraints that differentiate public cloud data centres in key hub locations, noting the limitations imposed by power and land availability. The findings underscore the strategic importance of hyperscale data centres in meeting the growing demand for scalable IT architecture.