On the outside they look no different to standard office or industrial buildings. Inside, however, is mission-critical IT infrastructure for governments, businesses and individuals housed across huge data centres. With high-tech generators, cooling systems and battery backups, these increasingly specialised facilities are designed to keep computer servers running and information flowing, even when the grid goes down.
Their growing importance has translated into strong equity returns. Data centres is the best-performing listed real estate sector in 2026 by a wide margin, rising around 40% — roughly eight times the broader US stock market return[1]. It was also the only REIT sector to post gains during the March sell-off triggered by the Iran war, demonstrating a degree of resilience that few other property types can match.
SKAGEN m2 has benefitted from this positive momentum. Equinix, the world's largest data centre REIT, has been our best contributor this year, adding 1.3% to absolute return. Shares in the US company, which operates more than 260 facilities across 72 metropolitan areas globally, have re-rated alongside its operational turnaround and a strengthened growth outlook. Helios Towers, which provides the mobile connectivity infrastructure across Africa that generates the data traffic which ultimately flows into and between data centres, is the third largest contributor, adding a further 0.5%.
Part real estate, part infrastructure, part tech
Driving such strong equity performance has been investors’ appetite this year for exposure to either AI or HALO (heavy assets, low obsolescence) stocks. By straddling the intersection of real estate, infrastructure and technology, data centres also provide attractive longer-term investment characteristics.
Their tenants include some of the world’s largest and most creditworthy organisations, such as Alphabet, Amazon, Microsoft and Meta, with leases typically running for 10 to 15 years and containing annual inflation-linked rent escalators. Expensive switching costs mean that retention rates are high – the result is a cash flow profile that combines real estate-like income visibility with infrastructure-like demand resilience.
Demand is also accelerating. The global data centre sector is expected to expand at a 14% compound annual growth rate through to 2030, driven by cloud growth and AI, which is forecast to represent half of all data centre workloads by the end of the decade, up from around a quarter (23%) today. A pivotal shift is anticipated next year, when inference workloads — the real-time application of AI models — are set to overtake training as the dominant source of demand. This is important for investors because inference requires geographically distributed capacity close to end-users, expanding the opportunity set across a far broader range of markets rather than concentrated in a handful of locations.
The capital being deployed to support this buildout is eye-watering. Combined spending by Alphabet, Amazon, Meta and Microsoft was around $350 billion last year, growth of over 65% on 2024 which is expected to accelerate further in 2026[2]. McKinsey estimates that global data centre investment will need to reach around $6.7 trillion by 2030, around three quarters of which will be specifically directed to AI-related facilities[3].
As primary markets run into power constraints, demand has spilled into "next-tier" locations — places hundreds of miles from the established hubs that offer large parcels of land, multi-hundred-megawatt power availability and quick delivery timelines. According to Green Street, roughly two-thirds of all new US data centre leasing activity in 2025 took place in next-tier markets, which now account for approximately 30% of total US third-party inventory. Europe is on a similar trajectory. Around a fifth of last year’s new leasing activity occurred outside traditional ‘FLAP’ markets[4] and land-banking is already underway across the Nordics and Iberian Peninsula.
With capacity struggling to keep pace with surging demand, landlord economics are increasingly favourable. Green Street expects data centre revenue per available foot to grow at a compound annual rate of approximately 5% through 2030 — comfortably outpacing other commercial property types.
Portfolio exposure
SKAGEN m2 provides data centre exposure through two primary holdings. Equinix has a leading US position but generates approximately a third of revenues in Europe, including a dominant presence in the FLAP markets where supply conditions are tightest. The company also benefits from its network-dense portfolio which is difficult to replicate due to the ecosystem effects and high switching costs.
Goodman Group provides complementary exposure. The company has pivoted from logistics toward data centres, with approximately two-thirds of its development projects now dedicated to digital infrastructure. It is well-placed to capture development margins as new capacity comes online across Australia, Asia, and Europe.
Prologis, American Tower and Capitaland either operate, construct or hold data centre pipelines, while Helios Towers and Cellnex Telecom further extend the fund’s exposure to the wider connectivity ecosystem that feeds data centres. In total, over a quarter of the portfolio has exposure to the digitalisation and the data centre segments.
In our view, investing in data centre companies supports an active approach, particularly as valuations have re-rated. While there remains uncertainty over how much capacity AI will ultimately require, additional demand tailwinds from data proliferation and e-commerce – combined with continued supply constraints – mean that selecting the right stocks is the best way to gain exposure to what we believe is the most attractive secular growth story in global real estate.
[1] NAREIT Data Centre Reit Index (+39.8%) vs. S&P 500 Index (5.1%) in USD).
[2] Source: Green Street 2026 Data Center Outlook.
[3] Source: The cost of compute: A $7 trillion race to scale data centres, McKinsey, April 2025
[4] Flap: Frankfurt, London, Amsterdam, Paris.