Following the publication of RLB’s latest Data Centres Trends Report, RLB’s Head of Advanced Tech, Nikki Venetsanakis spoke to leading property publication, Estates Gazette, about the sector’s continued rapid growth, and why unlocking power capacity will be critical to sustaining it.
The data centre sector is experiencing rapid growth, but structural constraints around power, land and delivery risk mean a more innovative approach is needed to sustain that expansion.
The problems remain consistent: limited land, constrained power supply and a complex planning environment. In response, operators are increasingly turning to risk-sharing partnerships to improve project viability.
“Traditionally, clients within this industry have carried the majority of the risk,”
Said Venetsanakis, whose firm has advised on more than 400 data centre projects with a combined construction value of £35bn.
“Consultancy teams and contractors have had very specific risk profiles tied to their service lines, whereas we’re now moving into an era where clients are expecting true partnership.”
Age of intelligence
Geopolitical pressures are also feeding into delivery challenges. The ongoing conflict in Iran is expected to impact supply chains, affecting lead times, component costs and energy prices.
“There will always be an impact on supply chains from delivery times and overall lead times to the cost of components and the price of oil,” Venetsanakis said.
Against this backdrop, risk mitigation has become central, with greater emphasis on long-term contractual relationships and delivery certainty. Despite these pressures, Venetsanakis remains optimistic about the sector’s resilience:
“We’re in an age of intelligence – people find ways to move around what’s happening and still ensure that their projects go on,” she said.
Alongside delivery risk, power availability remains a significant constraint on growth. RLB’s research has found that 35% of senior decision makers cited access to power as the sector’s primary challenge. At the same time, 69% expect private power purchase agreements, on-site solar and battery storage to play a growing role in reducing reliance on the grid over the next three years.
However, Venetsanakis warned that alternative energy sources alone will not solve the issue.
“They’re incredibly viable as a support mechanism, but they will never be able to be a sole provider,” she said.
The scale of infrastructure required also introduces additional risk considerations, further limiting the feasibility of relying solely on on-site solutions.
As a result, Venetsanakis pointed to a hybrid model combining grid supply with alternative energy sources as the most viable long-term approach. While nuclear energy is currently the closest alternative to grid provision, it is not sufficient on its own.
“You have to think of it as a hybrid approach,” she said.
While these constraints are unlikely to disappear, Venetsanakis argued that a combination of risk-sharing partnerships and hybrid energy strategies will underpin the sector’s next phase of growth.
This is an abridged version of an article that first appeared in Estates Gazette.
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