Real estate companies around the world are eyeing one area right now: data centers, according to Citi. "One of the compelling emerging themes globally across Real Estate is the expansion of industrial and diversified companies into datacenters," said Citi. "The higher potential returns from data center development is creating strong interest from real estate companies across the globe exploring and expanding their datacenter footprints," the bank added in a June 17 note.
Citi noted the push toward data centers is being driven by major themes such as artificial intelligence and nearshoring. "As a result, we expect demand to keep pace or outpace supply over the next few years, contributing to better KPIs and development returns for the data center category," Citi said.
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