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Mega-what? Capex, depreciation could rise as data centres focus on AI

Goola Warden
Goola Warden • 14 min read
Mega-what? Capex, depreciation could rise as data centres focus on AI
Data centre REITs have been sold to retail investors as typical real estate plays, but are REIT managers here telling you the full story about the capex required to keep their assets relevant? Photo: Keppel
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Data centre developments today are much more capital-intensive than in the past. The costlier fit-out means REIT managers and investors must account for more depreciation

Data centres in REITs provide investors with a conundrum. These buildings form a major part of the value chain for artificial intelligence (AI); they also house the cloud, which powers a large part of our digital life: social media, banking and financial services, and e-commerce are just some of the daily tasks we use data centres for.

On the other hand, the cost to build and maintain data centres at highly sophisticated levels is likely to accelerate.

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