Data Centres in Demand: Is Your Land the Perfect Fit?

The data centre industry is in the middle of the largest infrastructure buildout in commercial real estate history. According to JLL, average monthly data centre construction starts reached $10.1 billion through March 2026, representing a 600% increase over just two years. If that pace holds, full-year construction spending will reach $121 billion - more than the GDP of many small nations. For landowners sitting on industrial parcels, agricultural land near substations, or even underperforming office parks, this represents a generational opportunity. But not every property is suitable. Understanding what developers actually look for is the essential first step.

According to Avison Young market intelligence, approximately 30% of land transactions in 2024 involved institutional real estate stakeholders - developers, REITs, private equity firms, and sovereign wealth funds - who increasingly view data centre sites as strategic long-term investments. Howard Berry, Principal and Director of Data Centre Solutions at Avison Young, puts it directly: "Data centres are in high demand and landowners are well-positioned to reap the benefits, especially if their property has access to power and access to a fibre network - the two primary traits that data centre developers will want to confirm right out of the gate."

Power access is the single most important factor. A typical hyperscale data centre campus requires 50 to 500+ megawatts of electrical capacity, and utility interconnection timelines have stretched to 24-36 months in established markets. Properties located within 5 miles of a high-voltage substation with available capacity are significantly more valuable than those requiring new transmission infrastructure. In Northern Virginia, the world's largest data centre market, Dominion Energy's interconnection queue extends beyond 2029. This constraint has pushed developers to seek sites in secondary markets across Pennsylvania, the Carolinas, Ohio, Indiana, Wisconsin, and even Wyoming, where Microsoft recently acquired 3,200 acres near Cheyenne. A property with 20+ MW of available power capacity can command land premiums of 5-10x over comparable industrial parcels.

Fibre connectivity is the second dealbreaker. Data centres require diverse, redundant fibre routes to multiple carriers and internet exchanges. Properties with on-site lit fibre - or within 1 mile of major fibre routes - can be operational 3-6 months faster than sites requiring new fibre construction. The cost difference is significant: a new fibre build can add $200,000 to $1 million depending on distance and terrain. For reference, Zayo Group operates over 130,000 route miles of fibre across North America, and properties located along their network command a meaningful premium.

Beyond power and fibre, developers evaluate a checklist of secondary factors. Zoning is critical - industrial or commercial zoning is preferred, and agricultural or residential zoning will require a rezoning process that typically takes 6-12 months with no guarantee of approval. Parcel size matters: hyperscale campuses typically require 20-100+ acres, while edge deployments can work on 2-5 acres. Water access is important for certain cooling configurations but is becoming less critical as air-cooled and liquid immersion systems reduce water dependency. Flood zone status is typically a disqualifying factor - insurers and operators will not accept the risk. And proximity to population centres matters for latency-sensitive workloads, though many AI training facilities can operate in remote locations.

The numbers illustrate the scale of opportunity. The U.S. market alone has nearly 4 GW of colocation projects and nearly 5 GW of hyperscale capacity either underway or planned. Moody's projects $3 trillion in global data centre spending over the next five years. Among the largest announced projects: OpenAI's Stargate complex in Texas (estimated at $100 billion), Vantage Frontier in Texas ($25+ billion), Meta's 1,000 MW campus in Indiana ($10 billion), Microsoft's 15-building campus in Wisconsin ($13 billion), and AWS's multi-campus development in Mississippi ($25 billion). Developers behind these projects are actively acquiring land at scale, often purchasing thousands of acres at a time to secure optionality for multi-phase buildouts.

Contrary to common concerns in local communities, modern data centres are not the environmental burden often assumed. Water usage has been dramatically reduced by advanced cooling technologies - air-cooled systems and liquid immersion cooling can eliminate water consumption entirely. Power usage effectiveness (PUE) ratios have improved from 2.0+ a decade ago to 1.2-1.3 in modern facilities, meaning less than 25% of power is used for cooling and overhead. Many operators now procure 100% renewable energy through power purchase agreements, and several hyperscalers including Microsoft, Google, and Amazon have committed to net-zero carbon operations by 2030. Data centres also generate significant local tax revenue and create well-paying jobs - a typical 100 MW campus generates $10-30 million per year in property taxes.

For landowners considering whether to engage, the process typically starts with a professional site viability assessment. This evaluation covers power access (distance to substation, available capacity, utility utility timeline), fibre connectivity (on-site or nearby routes), zoning status, environmental factors (wetlands, flood zones, endangered species), and development capacity (how many MW the site could support given parcel size and setback requirements). Assessment results position the landowner to negotiate from a position of knowledge, whether they choose to sell the land outright, enter a ground lease (which can generate $50,000-200,000+ per acre per year for prime sites), or participate in a development joint venture.

The window of opportunity is significant but not unlimited. As more supply comes online in the late 2020s and primary markets solve their power constraints, the premium for new sites may moderate. Landowners who act now - while demand is at its peak and developers are competing for available sites - are best positioned to maximize value. The convergence of AI-driven demand, grid constraints pushing development into new geographies, and trillions of dollars in committed investment creates conditions that may not repeat for decades. A professional assessment is the essential first step in understanding whether your property could be part of this transformation.