INTRODUCTION Contributed by: John Sullivan and Michael Haworth, DLA Piper LLP
in North America, Europe and Asia Pacific, respond - ents identified logistics and warehousing second, and industrial and manufacturing third, in response to a question regarding which asset classes will present the greatest investment opportunity over the next 12 to 18 months. In the US, leasing activity in most markets was below pre-pandemic averages as of the end of last year. However, new construction has been limited relative to recent years, with 2025 construction starts down by about 25% from the 2017–2019 average. In addi - tion, because only 15% of US logistics demand is tied directly to global trade, much of the US logistics mar - ket is not overly exposed to trade-related disruptions. In Europe, many countries are committing larger amounts to their industrial sectors to boost their capacity for self defence, which could provide a boost for manufacturing and industrial assets. Industrial construction starts are down 68% from recent peaks, suggesting supply constraints over the next few years that could support rental growth. In Asia, there has been stabilising industrial tenant demand and a rapid decline in new supply. In much of Asia, vacancy rates peaked in the second quarter of last year and are expected to decline. Data centres Although the debut of DeepSeek at the start of 2025 raised concerns about the possibility of reduced data centre demand, a massive, AI-driven leasing and capex spending spree by major tech companies pushed those concerns aside. As the year went on, the demand for data centres reached record levels, driven by the hyperscalers and neocloud providers. The aggregate capital expenditures of the world’s four largest data centre tenants in 2026 are projected to be around USD650 billion – an approximately 60% increase over last year. To put the increasing need for data centres in perspective, Nadeem Meghi, Global Head of Real Estate at Blackstone, notes that more data has been created in the last three years than in all of history combined. JLL predicts that the data centre sector will double in size (GW capacity) over the next five years, and believes that we could see up to
USD3 trillion in combined real estate and tenant capex spending by 2030. The Americas is the largest data centre region, repre - senting about 50% of global capacity. The Americas also has the fastest growth rate of the three global regions, with a projected 17% supply CAGR through to 2030. The US drives most of the activity in the region, accounting for about 90% of capacity in the Americas. JLL projects that APAC data centre capacity will expand from 32 GW to 57 GW by 2030, achieving a 12% CAGR. JLL also forecasts that colocation will lead growth at 19%, while on-premises capacity will decline by 6% as enterprises continue cloud migra - tion. JLL’s projected CAGR for EMEA’s data centre market is 10%, fuelled by government support for AI infra - structure and strong demand for sovereign AI clouds to meet data privacy regulations. JLL forecasts that the region will add 13 GW of new supply, with growth concentrated in established European hubs and emerging Middle Eastern markets pursuing digital transformation strategies. Drilling down further, Green Street believes that Columbus, Dallas, Milan and Paris will experience the largest growth in data centre supply over the next five years. Power availability and energy regulation pose chal - lenges to the robust growth of data centres. Nuclear energy is expected to gain increasing acceptance as a clean power source, presenting operators with new opportunities to balance stable power access and sustainability requirements. Regulatory require - ments in many jurisdictions are expanding beyond infrastructure efficiency to address the entire data centre ecosystem, and new policies are targeting the full resource life cycle, from mandating renewable energy to introducing regulations on water usage. For instance, Germany has a mandatory clean energy mix and Ireland is requiring operators to bring their own power. Certain US states, including New York and Vir - ginia, are also considering legislation that would limit permits for new data centre construction or eliminate
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