KBS - Digital Infrastructure and Data Centres - Market Insight

KEY INVESTMENT DRIVERS

• The strategic rollout of 5G network connectivity is a key focus in the UK, spearheaded by major telecom operators, including EE, Vodafone, Ericsson, Three UK, and O2. Complementing these efforts, the UK government has initiated projects such as 5G Logistics, 5G Ports, Smart Junctions 5G, AMC2, 5G CAL, 5G Factory of The Future, and 5GEM-UK. • In May 2023, Kao Data unveiled its plans to construct a 40 MW data center in Manchester’s Kenwood Point for a projected investment of $440 million ; the facility is set to go live in late 2025. The strategic move into Manchester aligns with Kao Data’s commitment to advancing the region’s computing capabilities and supporting the aspirations of the UK government. • The UK government is actively promoting digital infrastructure through projects like the Wireless Infrastructure Strategy, aimed at increasing wireless connectivity by 2030, and the Digital Strategy, outlining comprehensive digital policy across critical domains. • Some factors aren’t specific to the UK. One reason is the increasing take-up of cloud-based software. One source assesses global growth here at 18% . Another factor is the Internet of Things; there are currently 13 billion Internet-connected devices , a number expected to double by 2030. • Contractual structures are increasing in sophistication, with newer options such as colocation growing; this means the situation where those who own the servers rent space rather than operating their own facility. New centres dedicated to colocation are increasingly seen.