^{Photo: Data Center Dynamics}

For decades, real estate investors chased what was tangible—luxury office towers, malls, and hotels that defined city skylines. But the future of property is shifting from the visible to the invisible, as the rise of artificial intelligence and cloud computing fuels a massive surge in data center demand worldwide.

“The world of real estate is changing from what I’d call the ‘visible’ to the ‘invisible,’” explained Kishore Moorjani, CEO of CapitaLand Investment’s alternatives and private funds team, during the Milken Institute Asia Summit in Singapore. “Everything we can’t see but use—the cloud—lives in data centers. That’s what’s driving the value shift.”

Investment Appetite Surges

The trend is unmistakable: investors are piling into data infrastructure. According to a 2025 CBRE survey, 95% of major global investors intend to increase allocations to data centers this year. Of the 92 institutions polled, 41% plan to commit $500 million or more in equity—up from 30% the year before.

The momentum is being driven largely by AI workloads, which require massive computational and energy resources. Goldman Sachs projects that global data center power demand will surge 50% by 2027 and 165% by 2030, fueled by cloud adoption, generative AI, and the need for high-speed storage and networking systems.

JLL’s APAC capital markets CEO, Stuart Crow, said investors are increasingly shifting portfolios away from traditional property types and into alternative assets like data centers, energy storage, and related infrastructure.

Goodwin Gaw, managing principal at Gaw Capital Partners, added that his firm is actively expanding into Chinese data centers, underscoring how competitive this market has become globally.

The Rising Cost of AI Infrastructure

Building these digital fortresses is not cheap. A single hyperscale data center—the type used by cloud giants like Amazon, Microsoft, and Google—costs about $12 million per megawatt to construct. Modern facilities often range between 150 and 300 megawatts, meaning a single site can require more than $3.6 billion in investment.

For next-generation AI-focused facilities exceeding 1 gigawatt of capacity, costs can climb into the tens of billions. Boston Consulting Group estimates hyperscale providers will need to invest $1.8 trillion globally between 2024 and 2030 just to keep up with soaring demand.

Banks are feeling the pressure. “Financial institutions are increasingly strained by the sheer scale of lending required for these projects,” said CapitaLand’s Moorjani. “It’s not just the volume—it’s the quantum of cost needed to put capacity in place.”

A Capital Crunch on the Horizon?

Despite enthusiasm from institutional investors, panelists at the Milken Summit noted that a significant funding gap is emerging. Traditional banks are approaching their limits in terms of exposure, raising the question of whether enough capital will be available to sustain the breakneck pace of development.

“So the biggest question mark for the real estate community is: is there enough capital at the moment?” said JLL’s Crow.

This challenge is compounded by macroeconomic headwinds. Savills, in a September outlook, forecasted global commercial real estate investment to grow 8% in 2025, far below its earlier projection of 27%. Rising construction costs, financing constraints, regulatory complexity, and labor shortages are slowing projects.

Broader Impacts on Real Estate

The AI revolution may also reshape how companies use physical real estate. With automation reducing headcount in some industries, corporate tenants are rethinking office space requirements. As firms shrink or restructure office footprints, landlords may see slower recovery in commercial demand even as data center demand skyrockets.

Despite these challenges, institutional capital is still circling the sector. Vast pools of undeployed funds remain, and data centers are increasingly being seen as core infrastructure, not just niche investments.

The Bottom Line

Data centers are rapidly becoming the crown jewels of global real estate, underpinned by AI’s insatiable demand for computing power. Yet, the immense capital needed—running into trillions—raises a critical question: will the financing pipeline keep pace with the digital gold rush?

If it does, data centers could reshape the global property landscape for decades, marking a fundamental shift from skylines to server farms as the true measure of real estate value.