PGIM buys Munich data centre site as demand rises by 30% pa

[Image: Taylor Vick/Unsplash.]

PGIM Real Estate has acquired a data centre development site near Munich on behalf of its closed-ended value-add fund European Value Partners II.

The property is located at Unterschleissheim, in the Greater Munich area, between the city of Munich and its airport. A 30 MVA (megavolt ampere) power supply has also been secured as part of the acquisition.

Munich, Germany’s third-largest city, is home to a number of large corporations, including seven DAX companies and several of the country’s leading universities. It is also the location of  one of seven connectivity hubs in Germany – the DE-CIX internet exchange – and benefits from long-haul fibre routes passing through Munich to eastern and southern Europe.

“Strong and surging demand for data centres, combined with low supply and limited development opportunities in urban areas translate into a very attractive investment opportunity for long-term investors,” said Nabil Mabed, senior portfolio manager for European Value Partners.

“Data creation, and thus global demand for data centres is expected to grow by a yearly average of roughly 30% to more than 2,100 zettabytes in 2035, not least due to ongoing digitalisation efforts and recent developments in artificial intelligence.”

Mabed added that modern data centres in the colocation segment with strong ESG characteristics is in strong demand by both operators and data centre customers. “With limited short-term development potential in Frankfurt, the German data centre market is shifting focus towards Berlin and Munich.”

DLA Piper was legal advisor to PGIM Real Estate.