Partner Frankfurt
"Data centres are no longer just IT infrastructure—they’re now critical components of national economies, sovereign digital strategies and institutional investment portfolios."
As digital transformation accelerates across every industry, data usage is rising exponentially—and so is the demand for the infrastructure that powers it. Global investment in data centres is projected to reach hundreds of billions of dollars over the next decade. However, this boom brings with it a complex web of legal, regulatory, and financial challenges.
From planning approval to energy procurement and cross-border data compliance, data centres sit at the nexus of real estate, infrastructure, technology and regulation. Meanwhile, their capital-intensive nature has brought a wide array of investors—real estate funds, sovereign wealth funds, infrastructure platforms and institutional lenders—into the market.
The Legal and Commercial Landscape
Data centre projects are highly complex. Structurally, they often combine elements of traditional real estate development, high-tech equipment financing, infrastructure-grade service delivery and regulated data operations. The legal implications cut across multiple disciplines.
1. Land Use, Zoning and Permitting
Securing suitable land remains one of the most difficult early hurdles for data centre developers. In densely populated cities, zoning regulations often do not address digital infrastructure, leading to lengthy planning processes. In emerging economies, unclear regulatory precedents can slow projects even further.
"Securing suitable land remains one of the most difficult early hurdles for data centre developers."
2. Power Supply and Sustainability
Data centres are among the most energy-intensive assets in global infrastructure. Access to stable, high-capacity electricity—often from renewable sources—is crucial. Legal teams must navigate grid interconnection rules, power purchase agreements (PPAs), and local emissions and energy efficiency standards.
3. Data Sovereignty and Cybersecurity
Global operators must manage a growing patchwork of data protection, locallisation, and cybersecurity laws. As governments seek greater control over digital infrastructure and personal data, compliance becomes more resource-intensive—and non-compliance riskier.
4. Financing and Transaction Structuring
Data centre development is capital-intensive, with construction and equipment costs often running into the hundreds of millions. Financing models are evolving rapidly—project finance, sale-and-leaseback, data centre REITs and joint ventures all play roles. Legal due diligence is critical, particularly around asset classification and security interests.
5. M&A Activity and FDI Screening
The sector has become one of the hottest targets for M&A, with private equity and infrastructure funds acquiring operators and assets globally. These transactions often involve national security, foreign ownership restrictions and critical infrastructure regulations.
Introducing Our Two-Part Series
"Access to local legal knowledge and cross-border coordination becomes a competitive advantage."
To support clients navigating the evolving data centre landscape, WFW’s infrastructure team is publishing a two-part series analysing the regulatory and legal framework impacting that sector in key markets:
Part 1: Germany, Italy, Spain, Australia, Indonesia, Thailand, and Vietnam.
Part 2: France, the UK, Singapore, Malaysia, Greece, and the Middle East.
Why This Matters for Financial Stakeholders
Whether acting as lenders, sponsors, investors, or advisors, stakeholders in the data centre ecosystem must understand the legal drivers of value, risk and compliance in this asset class. As deal structures become more innovative and regulatory frameworks more demanding, access to local legal knowledge and cross-border coordination becomes a competitive advantage.
Contact our infrastructure team for guidance on structuring transactions, navigating regulations, or assessing new markets.
Click here to view the full article series.
Key contacts
Partner Frankfurt
Managing Associate Frankfurt
