Data Centre Investment Calculator

Data centre investment calculator measures cap rate for colocation/hyperscale facilities. 100M facility, 10MW capacity, 150/kW/month, 80% occupancy, 8M opex = 14.4M gross income, 6.4M NOI, 6.4% cap rate. AI boom (2023-2025) driving massive data centre demand - waiting list 2-3 years for hyperscale capacity.

Example: 100,000,000 data centre, 10,000 kW capacity, 150 monthly rate per kW. Gross potential = 18M annually. 80% occupancy = 14.4M effective gross. Operating expenses 8M (cooling, security, staffing, power conditioning). NOI 6.4M. Cap rate 6.4%. Reasonable for stabilised facility - hyperscale developments target 10%+ unlevered.

Data centre dynamics: (1) AI boom driving 30%+ annual demand growth. (2) Power availability becoming limiting factor (Northern Virginia, constraints). (3) Cooling innovation critical (PUE - Power Usage Effectiveness). (4) Customer concentration risk (3-5 hyperscalers dominate). (5) 10-15 year lease terms. (6) High capex (10-15M per MW). Access: Equinix, Digital Realty, CyrusOne (REITs), KKR Data Centre. Direct ownership: institutional only (100M+ deployments).

A worked example

Try the defaults: facility cost of 100,000,000, total kw capacity of 10,000, monthly rate per kw of 150, occupancy of 80%. The tool returns 6.40%. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Facility Cost, Total kW Capacity, Monthly Rate per kW, Occupancy %, and Annual Operating Expenses. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.

The formula behind this

Annual revenue = kW × monthly rate × 12 × occupancy. NOI = revenue - opex. Cap = NOI/cost. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. The number represents one scenario rather than a forecast.