Our commitment to you is complete honesty: we will never allow affiliate partner relationships to influence our opinion of offers that appear on this site. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why. Signal Stock Confusion? Data source: National Association of Real Estate Investment Trusts. 1125 N. Charles St, Baltimore, MD 21201. Singapore has its drawbacks. Take the first step towards building real wealth by signing up for our comprehensive guide to real estate investing. Data center REITs are enjoying a rebound in stock prices this year after big gains in 2016 and 2017 before falling off some in 2018. How to Buy Your First Investment Property With 5% Down (Or Less), These REITs are Immune to the Coronavirus' Impact, Cities and States That Have Paused Evictions Due to COVID-19, The Metros Where Retail CRE will be Hit the Hardest. Data center REITs have performed well in recent years and appear poised to capitalize on the rapid growth of data collection. The company also broke ground last month for its third center in Singapore. Did Elon Musk Tweet Have Investors Piling Into SIGL Stock? The data center REIT sector is relatively new compared to other REITs. A business that began with small warehouses in central cities, where phone exchanges interconnected, is now built on finding big parcels of empty land near where cloud giants intend to build. Data Center Real Estate Investment Trusts (REITs) manage, develop and own data center facilities, offering solutions to individuals along with small, medium and large companies. Of its 1,000 customers, almost a quarter are Fortune 1,000-size companies. Brad Thomas of iREIT Investor notes that, while Digital Realty is an aggressive acquirer of data centers, it doesn’t account for acquisitions aggressively, which means it’s not stressing its balance sheet at the expense of the long term. Sign in here. The company was launched in 2001. “The attractiveness of data REITs is in their high dividend yield, in contrast to most firms in the tech sector,” she said. All rights reserved. Learn More.Already a member? Add a 19% one-year gain in the stock price and you get a total return of about 22%. Find out the details you need to know about tech and data center REITs. A modern data REIT must acquire land and build ahead of demand, competing with other REITs, private equity companies trying to build new REITs from scratch and the cloud owners themselves. The Ascent's Best Cities for a High Salary and Low Cost of Living -- How Does the Real Estate Measure Up? The company’s total one-year return as of the end of September was 29.23%. It now has 214 centers with 34.5 million square feet of rentable space in the U.S. and Europe. Copyright © Some speculators are betting CONE will be acquired, which keeps the price of the stock up. Then read our guide on 5 Important Factors You Need … Data center REITs can be a relatively low-risk way to invest in the technology industry. Data Center REITs and Digital Infrastructure Companies are subject to risks associated with the real estate market, changes in demand for wireless infrastructure and connectivity, rapid product obsolescence, government regulations, and external risks including natural disasters and cyberattacks. Even as retail, commercial and hospitality properties struggle, shares in Keppel DC REIT, the island’s largest landlord of data centers by market value, have recouped most of their March losses. Dana Blankenhorn is a financial and technology journalist. Compensation may impact where offers appear on our site but our editorial opinions are in no way affected by compensation. It has since been updated and republished.]. Digital Realty’s one-year return was 19.64% as of the end of September. The shares are up about 270% in the last five years, while quarterly dividends have tripled from 36 cents per share in 2014 to $1.10 now. Founded in 2001, it was bought by private equity players ABRY Partners in 2007 and then by Cincinnati Bell, a small phone company, in 2010. The company offers the largest number of interconnections with 333,000+ in total. Last year, Equinix had revenue of $5.09 billion, up from $2.44 billion in 2014, and it brought $365 million of that to the bottom line. Smaller market caps can deliver big gains, as CoreSite shows, but there are downsides. Plus, there’s that capital gain, almost 30% per year, doubling what you would have gotten from the average NASDAQ stock. Sign in here. Executives say recent strategic acquisitions have led to significant growth in their colocation and interconnection capabilities. CoreSite was born from two “telecom hotels,” as they were called then, in 2001, in San Francisco. Equinix is not a huge acquirer, its most recent buy being Metronode in 2017. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. The company has more than 9800 customers, of which 235 are Fortune 500 companies. This REIT had a one-year total return of 36.93% at the end of September. Data Center REITs suffered a bit of a rough patch in 4Q18, as investors feared over-building in the sub-sector as many of the REITs began construction of speculative projects. Long-term trends appear to be good for the sector. In a nutshell, the SRVR ETF provides individual investors with an opportunity to allocate a small percentage of an overall portfolio to focus on real estate assets that benefit from the exponential growth of data and the infrastructure companies need to deal with it. These types of data centres are known as colocation data centres. If cell-tower REITs are the biggest pandemic beneficiaries, data-center REITs like Equinix (EQIX) are a close second. The company is expanding its Reston, Virginia, data center by 50,000 square feet; opened a new data center in downtown Washington, D.C,; and is breaking ground near downtown Chicago on a 169,000-square-foot data center. As of yesterday’s close it had a market cap of $26 billion, and last year delivered $4.32 per share in dividends to investors. But I’ve found REITs to buy whose prices tend to rise over time . The company today has 45 data centers, mostly in the U.S., but it also has operations in Europe and Singapore. Simply click here to learn more and access your complimentary copy. Data Centre REITs are real estate investment trusts that invest primarily in properties that house storage systems, computer systems and other associated components. Secure Investments inHigh Quality Data Centres. Comprehensive real estate investing service including CRE. They reduced their interest to about 29% in 2016. Article printed from InvestorPlace Media, https://investorplace.com/2019/05/5-data-center-buys-that-deliver-sizable-income/. To a current buyer that’s a yield of just 2.17%. The digital economy has experienced exponential growth, and Cisco Systems expects this pattern to continue through several coming years. Operating cash flow has also doubled. CoreSite is the right stock for you if you’re mainly looking for exposure to the U.S. internet market. The valuations are indeed expensive as investors agree on the bright prospect of data centres and are willing to invest even at these levels. All rights reserved. Let time work for you. The Singapore REIT, which wants to acquire data centers in North America, has handed 30% returns to investors over the past year. Investing in them can provide steady returns as this sector grows. To learn more about CafeMedia’s data usage, visit: www.cafemedia.com/publisher-advertising-privacy-policy. There are five data center REITs in the market today and they're primarily based in the United States. Digital Realty Trust (NYSE:DLR) was formed as a public company in 2004 out of 21 data centers acquired out of bankruptcy by GI Partners, a private equity firm. 13 Things to Know Ahead of a Potential Lucid Motors SPAC Merger >>>, 5 Data Center REITs to Buy That Deliver Sizable Income, Cloud Czars are taking over the telecommunications market. Higher network traffic drives the need for servers, storage devices and communications gear. If you’re on the right side of a trend, you are almost certain to prosper. Learn more.Already a member? But those barriers have come crashing down - and now it’s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you. CyrusOne wasn’t publicly traded until 2013. Data Center REITs pay an average dividend yield of 2.3%, which is below the REIT sector average dividend yield of around 3.4%. They act as a sort of glue among the Cloud Czars, like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). It went public in 2013 and by 2015 Cincinnati Bell had sold out its stake. The Asian financial center had a much-publicized early success in containing the pandemic before an outbreak in dormitories densely packed with foreign workers, sending numbers soaring. Data centre real estate investment trusts (REITs) are companies that own real estate for the purpose of housing data centres. Their dividends have grown each year and the share prices have doubled in the past 5 years. It was founded in 1998, as the internet was primed to revolutionize how people interacted and shared information. We do receive compensation from some affiliate partners whose offers appear here. It is required to send 90% of earnings back to investors in the form of dividends. Over the last five years, the stock is up 137%, and if you bought in 2014, when the price of the stock was about $60 per share, your current yield is about 7.2%. Let’s take a closer look at how the data center REITs rank in terms of return. Buying a Home in These 7 States Gives You the Most Bang for Your Buck, www.cafemedia.com/publisher-advertising-privacy-policy, National Association of Real Estate Investment Trusts, Extensively researched articles in the areas of Real Estate Taxes, REITs, CREs, Regulation A and Its DC1 building in Virginia was the first large greenfield center to open, 20 years ago, back when such centers were mainly selling themselves as a way for corporations to speed data flows for things like video conferencing, or as alternatives to the Network Access Points (NAPs) that then dominated internet switching. QTS Realty Trust (NYSE:QTS) made that kind of shift in 2017, moving from managed services to being a “cloud on-ramp.” The company insisted the new plan would mean big new opportunities, but these have taken time to develop, with repeated misses on earnings estimates taking a toll on the stock. 18 Assets across 8 countries. The asset base has more than doubled, to $20.24 billion, and while there is $9.44 billion in debt on those assets, the debt-to-asset ratio has been improving. All rights reserved. After facing some temporary challenges last year, data centers saw a rebound in stock prices in 2019. In 2016, QTS acquired the iconic Chicago Sun Times newspaper plant and redeveloped it into a 475,000-square-foot data center. CyrusOne’s weakness comes from its history of being privately held. A single transaction can transform an investor’s play from the weakest stock on the block to a big stake in one of the strongest. Digital Realty recently expanded its presence in Northeast Asia with a 129,000-square-foot, carrier-neutral facility in Seoul. It’s expected to raise the dividend again, to $1.29 per share, later this month. Become a diversified real estate investor without ever talking to an agent or swinging a hammer. REITs are companies that own or finance some type of real estate property. But the company quickly came back for more, buying Ascently, based in Brazil, last year for $1.8 billion. Thus, we are going to see the huge growth in Data Centers in the REIT space moving forward. Millionacres does not cover all offers on the market. Three data center REITS follow and are perhaps the optimal place to be for strong alpha potential and respectable dividends. Properties in data centre REITs are highly specialised buildings, with provisions for climate control measures, and various system redundancies such as backup power supplies. Put Real Estate’s “Unfair Advantages” to Work for Your Portfolio. Copyright © 2021 InvestorPlace Media, LLC. 1125 N. Charles St, Baltimore, MD 21201. This was a $34 billion market last year. The data centers hosted by REITs aren’t all cloud-based, but they usually require connections to clouds. Data center REITs invest in real estate that's used to store computing infrastructure. Yesterday it closed at $480. The colocation market alone continues to grow at 10% each year, driven by the needs of the Cloud Czars, according to Synergy Research. Equinix, Inc. (EQIX) is the largest Data Center REIT by market cap at $34B with 200 data centers, in 52 markets on 5 continents and a 99.9999% uptime record. It expanded into Europe through the 2018 acquisition of Zenium for $442 million. This San-Francisco-based REIT has data centers based throughout North America, Europe, Asia, and Australia. Here is the story on the four major names in the space. quotes delayed at least 15 minutes, all others at least 20 minutes. If you bought some shares five years ago, the current dividend would give you a yield of 5.75%. To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Need help interpreting the REIT data? The question now is whether all the good news has already been baked into the share prices. Related: Data Center REITs Soar Back After a Bruising 2018. For real-estate investment trusts, or REITs, that make money by hosting data, the more people pretend to work from home and watch Netflix, the better. Here are some good data center REITs to buy. All this makes Equinix one of the best data center REITs to buy. Equinix continues to grow its international footprint, most recently with a new Australian center. It’s part of a larger trend in which the Cloud Czars are taking over the telecommunications market. Data center REITs offer a range of products and services to help keep servers and data safe, including providing uninterruptable power supplies & air-cooled chillers. Data Center REITs offer hosting, colocation and cloud on-ramps to enterprises and Internet Service Providers. It was then called CRG West, and the location was where Internet Service Providers hooked into phone networks, and where enterprises could go for big bandwidth. QTS went public in 2013 and has since doubled in price, while the quarterly dividend has also doubled to its current 44 cents. Most data center REITs were founded around 2000 and make up a small percentage of REITs overall. This Site is affiliated with CMI Marketing, Inc., d/b/a CafeMedia (“CafeMedia”) for the purposes of placing advertising on the Site, and CafeMedia will collect and use certain data for advertising purposes. CoreSite Realty (NYSE:COR) is much smaller than Equinix or Digital Realty, with a market cap of $5.3 billion. Data Center REITs - the best-performing property sector of 2020 - have stumbled over the last quarter as lukewarm earnings results and intense competition have clouded the outlook for 2021. As of this writing he owned shares in AMZN. Access to timely real estate stock ideas and Top Ten recommendations. Its early expansion was funded by the Carlyle Group, a private equity firm. Data center REIT shares have rewarded patient investors with gaudy price appreciation. Data Center REITs offer hosting, colocation and cloud on-ramps to enterprises and Internet Service Providers. This Overland Park, Kansas, real estate investment trust has 25 data centers throughout North America. Data center REITs are a hot, dividend-paying area of the alternative REIT space. QTS began life in Kansas, in 2003, expanded into Atlanta through a 2005 acquisition, and now has 25 data centers with 5.7 million square feet of rentable space. You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. It bills itself as offering “hybrid cloud solutions,” with its close connections to big clouds like Amazon and Microsoft, and colocation services for enterprises building their own cloud systems. But five years ago, the stock was trading at $172 per share. The company’s biggest deal came in 2017, a $7.8 billion agreement to buy DuPont Fabros Technology. They act as a sort of glue among the Cloud Czars, like Amazon (NASDAQ: AMZN ) … That’s a yield of 3.55%. These data centers usually contain heating, ventilation, and air conditioning … [Editor’s note: This story was previously published in April 2019. Equinix (NASDAQ:EQIX) was founded in Redwood City, California in 1998 and has focused on global services almost since its inception. QTS has converted large retail buildings and manufacturing facilities into data centers, too. The company also expects to see more demand in the European markets. CyrusOne Inc. is based in Dallas, Texas and has approximately 45 data centers worldwide. Real Estate Investing: 10 Ways to Build Wealth. One of the good things about data center REITs is that their growth isn’t dependent on consumers spending money. A strategic shift can take a stock down hard. Learn more! 3 Megatrends (and 9 Stocks) to Buy for the ‘Blue Wave’. The adoption of 5G will accelerate the rise of digital economy and the consumption of data. Data centers are central to housing an organization’s IT operations and equipment. Name Price Distribution Yield Price to Book DPU NAV Property Yield Gearing Ratio; AI-'Aqar Healthcare REIT: 1.31: 5.95%: 1.01: 0.0780: 1.302: 6.37%: 40.9%: AI-Salam REIT & Conditions writing about all things … learn more and access your copy. Charles St, Baltimore, MD 21201 City, California, and.... Cisco systems expects this pattern to continue through several coming years house storage systems, systems. Agree on the market author of a trend, you can invest in the space and Cost! 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