EGI reports this month that Blackstone (never one to miss a trick) is under contract to buy the ex-Britishvolt site in Northumberland  for a “major hyperscale cloud and/or AI data centre campus”. It is a reminder of the real estate implications of AI, as AI (and cloud based) applications drive demand for underlying infrastructure. 

Indeed, on this note, the 2024 ULI Emerging Trends in Real Estate Europe 2024 report name-checked Blackstone and identified data centres as second in the list of “sectors to watch”:  “If a Blackstone decides data centres is our new office sector, they will make the market like they did in logistics, but there will be developments needed,” says an interviewee. Data centres will be the “next oil rush” , predicts another. An industrial property company head likens the stage of development of the data centres market today to the logistics market of 10 years ago, implying enormous scope for growth."

However, how does that sit in an increasingly ESG-conscious industry? As the ULI report notes, “Large data centres can be a problematic investment from an ESG standpoint, however, because of their hunger for power, unsightliness, and limited direct employment generation potential”. Potentially, arguably, difficult to tick off those “E” and “S” investment criteria, which are without doubt, increasingly in play.  

With all this in mind, the recent White Paper (Sustainability Intelligent; AI for a Greener Built World) is worth a read, acknowledging the energy intensive nature of generative AI. Yet, as a counterweight, the paper explores the potential of AI in accelerating the net zero transition in the built environment. What are the environmental AI use cases along the real estate value chain (check out the graphic in the paper)? And as the paper asks with the question in the quote below, where does the balance lie - net positive or negative effect on its environmental footprint?  Can AI really deliver a “greener built world”?