In this era of rapid digitalization the physical structures that facilitate the efficient transmission, storage and processing of data have increasingly critical roles to play in meeting our exponential growth in data usage. As digital infrastructure scales up, so does interest in investing into this new asset class, especially by long-term private capital investors.
Drawing from our extensive experience advising on a series of joint venture investments with long term financial investors and a range of recent landmark transactions in the last 18 months – our report highlights the key legal issues for data center investors, with a particular focus on:
- foreign investment controls addressing issues of data sovereignty and the renewed focus on critical infrastructure
- due diligence issues specific to data center businesses
- data privacy and cyber security regulatory requirements
- taxation across different jurisdictions
- M&A considerations and complexities
- financing structuring considerations compared to other asset classes
- sustainability challenges for data center investors given the high levels of electricity consumption required to run a data center
