Digital infrastructure
In 2020, Dromeus expanded its investment strategy to include digital infrastructure, recognizing the critical role hyperscale data centres play in the rapidly evolving digital economy. With a focus on Tier II and Tier III European markets, Dromeus targets underserved regions poised for growth through strategic investments in developing state-of-the-art data centre facilities. Leveraging our expertise in digital infrastructure, we aim to meet the increasing demand for cloud services, storage, and high-performance computing. By investing in scalable, energy-efficient assets, we contribute to the development of Europe's digital backbone, ensuring that our investments align with future data growth and sustainability trends.
Dromeus Capital Group focuses on identifying high-growth opportunities in the digital infrastructure sector, specifically in the data centre space. While Tier I markets such as Frankfurt, London, Amsterdam, Paris, and Dublin (FLAP-D) have long been at the forefront of data centre development, these markets are increasingly saturated and face escalating costs and constraints. As a result, more opportunities are emerging in Tier II and Tier III markets across Europe, where land and energy are more accessible, and regulatory frameworks are more conducive to expansion.
Saturation and escalating costs in Tier I Data Centre Markets
The rise of land and energy costs in Tier I markets like Frankfurt, London, and Paris has created significant barriers to new data centre developments. Established players are also facing operational challenges due to:
- Soaring land and energy costs: High costs are making it increasingly difficult for new entrants to maintain competitive returns on investment.
- Regulatory challenges: Stringent regulations around energy consumption and urban development are limiting the scale and pace of new data centre projects.
Data centres and digital infrastructure: A core focus
Dromeus has recognized the accelerating demand for digital infrastructure, particularly data centres, as a cornerstone of its real estate investment strategy. The growth of cloud computing, AI, and 5G technology is driving the need for large-scale data centre facilities in strategically located Tier II and Tier III markets.
We have directed our expertise in large-scale real estate developments to:
Investment thesis
Our investment thesis is rooted in seizing opportunities created by the ongoing saturation and constraints in Tier I markets, while capitalizing on the untapped potential of Tier II and Tier III markets across Europe.
The Rise of Tier II and Tier III Data Centre Markets
Dromeus has identified a strategic shift towards Tier II and Tier III data centre markets such as Athens, Milan, Madrid, and Warsaw. These cities, while not as globally recognized as Tier I hubs, offer significant advantages:
- Land and Power Availability: Tier II and Tier III markets provide more readily available and lower-cost land, combined with better access to sustainable energy sources, a critical factor in meeting modern data centre standards.
- Favourable Policy Environment: Local governments in these regions are actively supporting new developments, especially in areas needing urban regeneration. This allows us to secure prime real estate assets at more attractive terms than in oversaturated Tier I markets.
Regeneration & community impact
In addition to maximizing returns, we are committed to fostering community revitalization through our projects. We identify regions in Tier II and Tier III markets where traditional industries may have declined and use real estate development as a means of economic renewal. By investing in areas ready for regeneration, we create jobs, enhance local infrastructure, and contribute to the economic and social fabric of these communities.