Data Centre Investment Model

The model builds revenue from multiple contractual streams. Space and power rent is calculated as leased capacity in kW multiplied by a monthly recurring charge per kW, with annual escalators typically applied.

• Power pass-through revenue recovers tenant electricity consumption, calculated as IT load times hours and power usage effectiveness, then multiplied by the local rate; this is often billed at cost with a possible markup. Interconnection fees come from cross-connects multiplied by a monthly fee, common in carrier-neutral retail facilities.
• Non-recurring charges arise from new leases signed and setup fees. Together, these streams create a predictable, contractual revenue base with minimal seasonality, though power recovery can fluctuate with utility rates and cooling needs.

Costs are split between variable and operating expenses. Variable costs are dominated by utility power, which scales linearly with tenant IT load and PUE, plus water for cooling and direct cross-connect materials.

• Operating expenses include facility maintenance, security, property taxes, insurance, site staff, and corporate SG&A. Labour typically represents 10% to 15% of revenue, while technology, insurance, and regulatory compliance each account for a few percent.
• The model produces a gross margin of 50% to 70% and stabilised EBITDA margins of 50% to 65%, reflecting the high operating leverage once the facility is leased. Maintenance capex is estimated as a percentage of revenue, ensuring ongoing capital needs are captured.

The model incorporates phased construction, separating core and shell costs from MEP fit-out. Total build cost is calculated as shell cost per MW plus MEP cost per MW, multiplied by megawatts built.

• Construction typically spans 18 to 36 months, with MEP fit-out phased over time—often meaning not all capacity is fitted out on day one. Debt sizing follows a target debt-to-capital ratio, with drawdowns during construction, interest capitalised as IDC, and term conversion to amortising debt.
• Interest expense is based on the opening debt balance and annual rate. The debt schedule also calculates DSCR, a key covenant metric, and feeds into the income statement and cash flow.

The template produces an integrated set of financial statements: income statement, cash flow, and balance sheet, along with a returns sheet that calculates exit valuation, unlevered and levered IRR, equity multiple, and NPV.

• A checks sheet validates balance sheet integrity, capacity limits, PUE above 1.0, DSCR above 1.25x, stabilised margins, build cost per MW, and cash balances.
• These outputs allow users to evaluate investment feasibility, test occupancy ramp assumptions, and assess sensitivity to power costs and lease rates.
• The model is intended for underwriting data centre acquisitions or developments, providing a structured view of the asset-heavy, contractual cash flow profile typical of the sector.