Aroundtown real estate group wants to convert offices into data centers

The Luxembourg real estate company Aroundtown, which has its operational headquarters in Berlin, is planning to convert office space into data centers in response to rising demand in Europe. This was reported by the news agency Reuters on Wednesday.

As Timothy Wright, Head of Investor Relations at Aroundtown, explained, the company is in the initial phase of obtaining official approvals and hopes to work with specialized companies. Wright named companies from the cloud computing or autonomous driving sectors as potential tenants for the data centers. "In five years time, let's hope we have some data centres in our portfolio", Reuters quotes him as saying. The IT expertise still needs to be built up.

Approvals as a challenge

According to Wright, one of the greatest challenges in converting office space into data centers in Germany is obtaining permits from the local authorities. In addition, the respective energy suppliers have to confirm that the necessary energy requirements can be met, he said. Accordingly, Aroundtown has so far received official approval for the conversion of an office space into a data center in Frankfurt/M., but has not yet received approval for electricity consumption.

Once the permits are obtained, Aroundtown could either sell the real estate to generate quick revenue or do the conversion itself, Wright explained. Before construction work begins on such a conversion, Aroundtown wants to ensure that potential tenants have already leased the properties, as data center users generally have very specific requirements.

Growing demand for data centers

According to Reuters, Aroundtown has been confronted with higher vacancy rates for its office space since the COVID-19 pandemic –, not least due to the increase in home offices –. The company's focus is on office, hotel and commercial properties, particularly in Germany and the Netherlands.

The real estate company's considerations come at a time when Europe is facing growing demand for data centers. Earlier this year, EU Commission President Ursula von der Leyen presented a new AI initiative called "InvestAI". The aim of the initiative is to become less dependent on the United States and China when it comes to key technologies. To this end, investments totaling 200 billion euros are to flow into European AI development. The core of the initiative is a new European fund with a volume of 20 billion euros, which is to finance the construction of several AI data centers, which are to be established from 2026. However, the demand for computing power and corresponding data centers is also increasing on a smaller scale.

(akn)