2023 was the second-largest investment year in the past decade for data centers globally.

According to a report by global law firm Linklaters, investment in data centers reached $36bn for the year, $22bn of which was seen in the first five months.

Of the investment in 2023, around 62 percent was in the North American market. Europe, however, has seen a notable increase in investment, from six percent in 2022 to 20 percent in 2023.

Linklaters further noted that asset-backed securitizations (ABS) are becoming increasingly popular as a method for financing data centers, with the US seeing $21bn of ABS issuances since 2018. Linklaters predicts a similar trend will occur in Europe.

For 2023 alone, ABS issuances backed by data center revenues were $5.4bn in the US, and thus far in 2024, issuances have reached $3.7bn. Among those was CyrusOne's $1.175bn ABS offering, which closed in May 2024. Historically, 2021 saw the most ABS issuances in the last five years.

Elisabeth Johnson, structured finance partner at Linklaters (London), said: "Data centers have been the target of significant global investment, with appetite growing substantially within Europe. We're at the edge of witnessing asset-backed securitizations in Europe pick up pace as these ventures mature.

"This is an exciting time for the industry, where strategic financing structures will pave the way for the next wave of digital infrastructure expansion. Linklaters has successfully structured a large number of complex pan-European ABS structures and is expertly placed with its network of offices in all major European jurisdictions to advise on novel structures."

In 2024, Linklaters was involved in Ardian's acquisition of the data center platform Verne, and Exa Infrastructure's sale of seven of its data centers in Europe. In 2023, the company acted as legal advisor to Vantage for the company's $2.7bn investment partnership with DigitalBridge, MEAG, and Infranity.