The commercial real estate landscape is changing rapidly. A surge in demand for data infrastructure has given birth to a new kind of real estate asset called “powered land.” This refers to land that is fully prepared with the necessary permits, power commitments, and infrastructure to support data centers.
Currently, around 20,000 acres of powered land exist globally beneath operational data centers. However, industry experts project that nearly 40,000 more acres will be needed in the next five years. This is a massive area, almost three times the size of Manhattan or 1.5 times the size of Paris.
Why Powered Land Matters More Than Buildings
Traditionally, real estate development focused on constructing buildings. Now, the real challenge is securing reliable and abundant power to sites. David Steinbach, Chief Investment Officer at Hines, explains that the focus is shifting from building walls to delivering megawatts of electricity.
Hines has adapted by concentrating on the groundwork—mapping power grids, negotiating with landowners, and securing permits and financial guarantees for power delivery. This approach ensures land is “AI-ready” before construction begins.
Powered Land as an Investable Asset Class
Power rights have become scarce and valuable commodities. Once a piece of land has secured the right permits and power connections, it turns into a highly sought-after tradeable asset. Tech companies and energy producers now lead the competition for these valuable sites, more so than traditional real estate developers.
Private equity firms are taking notice. For example, Silver Lake and Commonwealth Asset Management recently launched a powered land platform with $400 million in capital to build a global portfolio of powered land. They are focusing on markets in the U.S., Canada, and the U.K., where power is becoming a limited resource.
Shifting Markets and Future Opportunities
Data center hubs are expanding beyond saturated areas like Northern Virginia. Growth is moving into power-rich regions in the Midwest and Texas. Europe offers promising opportunities due to its undersupply of powered land and rapidly increasing demand.
The Middle East is also emerging as a potential hotspot. Governments there are investing heavily in AI, renewable energy, and electricity infrastructure. This creates exciting prospects for developers and investors.
Challenges of Powered Land Development
Despite the opportunities, powered land development is complex. It involves finding suitable land, navigating local government entitlements, and working closely with utility providers to secure power commitments. Success requires specialized knowledge and careful planning.
Conclusion: The Future of Real Estate
Powered land represents a seismic shift in commercial real estate. It is not just about physical space anymore but enabling the infrastructure that powers the digital economy. Investors and developers who understand and embrace this trend will shape the future of real estate for decades.
