VALUATION OF…

Data Centres

Specialised facilities for housing computing infrastructure, valued on power capacity, redundancy, and specialised fit-out.

Methodology

Data centres are specialised properties whose value is heavily influenced by power capacity and redundancy infrastructure rather than floor area alone. Where let to a colocation or hyperscale operator on a long-term lease, the Income Capitalisation Method applies; where the specialised fit-out has no ready secondary market, the Cost Approach (Depreciated Replacement Cost) may be a more reliable cross-check.

Under the Big Five framework, the Income Generating Unit is typically defined by power allocation (kVA or MW) rather than square metreage alone; contract rental — often structured on a rate per kVA or per rack — is compared to market rental for comparable data centre space, and the capitalisation rate applied reflects power redundancy, connectivity and tenant covenant.

Power capacity and redundancy are the dominant value drivers, ahead of location or floor area. A Direct Comparison cross-check on a rate per kVA or per square metre against sales of comparable data centre facilities, where available, should be used to test the primary valuation.

Market Information

Market-level context for this asset class — industry and brokerage research on supply, demand and pricing pressures. These are third-party publications, summarised here for orientation only; the underlying data is the authors’ own and has not been independently verified by VDH.

Further reading

Cushman & Wakefield — 2026 Global Data Center Market Comparison (Data Center Advisory Group, seventh edition, May 2026). A global ranking of 107 markets against 24 variables spanning market fundamentals, power, land and regulatory risk. The authors characterise the present cycle as “managed growth” — development increasingly shaped by grid-power availability, permitting timelines and community opposition rather than demand alone — and rank Dallas the leading primary market worldwide. For our region, the EMEA tables include Johannesburg, Lagos and Nairobi, and Johor heads the APAC rankings, so the African and Southern-African pipeline sits within a genuinely global comparison. Read the report →

Valuer’s takeaway: this is brokerage market opinion, not evidence of any particular transaction, and its rankings and capacity figures are not independently audited — treat them as orientation, to be corroborated before use. Its central point reinforces the methodology above: for data centres, power capacity, grid access and regulatory/community risk are increasingly the dominant value drivers, and those risks belong in the capitalisation rate rather than being read off a broad market benchmark.

Caselaw

Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.