Panelists unpack why property markets tied to transport, tech and energy are surging back, blurring the line between real estate and essential infrastructure.
At Davos 2026, leaders across real estate, pensions, retail and data infrastructure argued that “the physical economy is the backbone on which the broader economy runs,” and is reasserting itself after a painful reset. Panelists attributed recent real estate underperformance to a “paradigm shift” in rates and a prolonged repricing, with stress concentrated in vintages from 2019–2022. Yet lower valuations, a “supply cliff,” and reviving transaction volume are resetting opportunity; one investor noted depressed sector valuations enabled acquisitions that would be far pricier in private credit.
Conviction clustered around two themes: living and digital infrastructure. Housing remains structurally undersupplied, but execution hinges on planning reform, community consent, and investment-grade returns. In data centers, demand is surging beyond the AI hype; “it’s not about square meters… it’s about the amount of power.” With build costs “north of $1,000 a square foot,” and service-level expectations of “100% uptime,” power and grid capacity have become the binding constraint, especially in the US and Europe, where participants warned of 30 years of underinvestment and rising community pushback.
The Middle East, by contrast, was portrayed as a capital-and-energy-rich beneficiary of regulatory predictability, while India was cited as rapidly scaling capacity through deliberate policy and renewables.
Hello and welcome. Thank you for spending your afternoon with us. To those in the room with us, as well as those watching online. We are here to talk about real assets and the physical economy amidst a digital world. I have a pretty esteemed panelist, a group of panelists with me. My name is Kate Marino. I am the executive editor at Axios, and I will have everyone introduce themselves before we get started.
Great. Hi, everyone. I'm Laura Haynes Pierce. I'm the co-CEO of Hines, which is a global commercial real estate investment manager, developer and operator with about 90 billion in AUM. And we're, located in about 30 countries globally, globally.
Ahmed Ismail I'm the CEO of based out of Dubai. We are a shopping retail entertainment ecosystem. We operate across 14 markets, serving 600 million customers every year. And we're most well known for mall of the Emirates with Dubai.
Hi. Good afternoon. And Tony Simmons CEO of LNG. So Legal and General was created in 1836. So we'll be 190 years this year. And I'm bringing a slightly different perspective to the panel as an investor. We have $1.6 trillion in assets under management. A bit less than 10% of that is our balance sheet, and a quarter of that is in real assets. So hope to bring some of that long term investment perspective into into the panel.
I'm Bill Meaney I lead our Iron Mountain. So we're not as old as you or.
Nobody is.
We're approaching we're approaching our 75th year. Some of you may know us more. If you saw the Big Short, the ubiquitous box saying Iron Mountain on the side, we didn't pay for that. That was just a real photograph, sadly. The but that's where we started off our business. If globally we have we're in 60 countries with about 9,000,000m² of industrial real estate. But more recently, which is, I think one of the reasons why we wanted to be on the panel is we're in the top ten data center companies around the world. We are REIT because of the real estate nature of our business in terms of how we serve our customers, and we're in 60 countries, not 60 countries with data center. But data center is obviously one of the fastest growing parts of our our business, our business segments these days.
Thank you. So as you can see, we have a panel with deep expertise and a wide variety of perspectives. So I think we're going to have a good conversation. And just a note that if anyone wants to share anything about any content here, please remember to use the hashtag F26. Okay. So let's get started. Since the pandemic and inflation that came after, real estate has underperformed other asset classes, what drove this underperformance and how has the environment changed after that? Who wants to take that?
Well, maybe maybe I can start and then, maybe Antonio can give the perspective of, of an investor. But, you know, as, as a firm that invests in real estate really across all asset classes globally and across the risk spectrum, I can confirm it's been a tough couple of years. You know, I think it really was a paradigm shift when interest rates shot up and, you know, have really stayed stayed high over the last few years. And that's made for, you know, a reset moment for real estate. And frankly, this has gone longer than the oh eight GFC. And so, you know, I think it's been a challenge. But what we are seeing is now values have reset and it, you know, transaction volume is starting to increase. And we're really optimistic about where the opportunity is going in 2026. We actually in 2025 did, a high watermark of acquisitions for our firm globally. And you know, I think we expect 2026 to outperform even that.
And with the resetting of values, are there any pockets where there's still a long tail on deals that were done, you know, ten years ago or eight years ago that something's got to give, so to speak?
I'd say, actually, that the challenge is deals that were done from 2019 to 2022. Yeah. And, you know, I think that that's, you know, there still will be some, some challenges there. But you know, challenge creates opportunity. I think, you know, we have teams on the ground in 380 cities. And, you know, having that local presence really allows us to uncover those opportunities. And, you know, I think we're the fundamentals of the real estate industry right now are actually incredibly strong because of the lack of supply that's happened now for several years. It's frankly a supply cliff across all major asset classes. And so, you know, I think I think it's going to be a really interesting market looking forward for real estate I don't.
Know maybe I agree I agree with Laura actually. So we we look at this from a very long term perspective. So there's different types of investors. If you think what what we do is pay people's pensions for 30, 40, 50 years. So on the asset side we invest for a really long term. So we're slightly less spooked by the the short term corrections. But I agree that now asset prices have corrected the we haven't seen the full recovery yet in terms of volumes coming into to real estate. But again, as you were saying, it's different subsets of of real estate. So for instance, we we are very invested in residential from a living perspective, a lot of affordable housing. We are a British company, but more than 50% of our AUM is outside the UK. If I look at almost all of our markets, there are restrictions in terms of construction, housing crisis. So there's a lot of asset classes where we are that we feel pretty good about. And if I take a slightly different perspective, we've used this period, this period where, real estate has been more depressed to actually buy companies in this space. So if I think about all the asset classes and I take a different one, private credit, private credit has been booming. And therefore, if as an asset manager, I want to buy a private credit player, I would need to pay 20 plus times earnings. So pretty expensive. I've done two acquisitions last year, Proprium Capital Partners and an investment in in a firm in in the US, Taurus in Boston, which are expanding my global footprint. But I use this as an opportunity because the valuations of real estate companies have been more depressed compared to other parts of the the asset management industry. But I continue to have a quarter of my overall balance sheet in, in real assets, and we take that sort of long term, long term perspective.
So I have to say the situation in the Middle East is completely different.
Good to disagree. It's kind of Thursday afternoon in Davos. I can only to wake up people actually.
So there was a very short lived I would say dip around sort of the pandemic, but the recovery and our business is anchored in Dubai, UAE, and then the broader Middle East has been quite rapid, and sustainable. I think, for one, the macroeconomic sort of fundamentals in the Middle East are a bit different than demographics are very different. And also the fiscal strength of the key economies, the UAE, Saudi, the wider GC has allowed these economies to absorb the Covid shock and deal with it in a much more, I would say, decisive, decisive manner. And in fact, when we look across all of our business and asset classes, valuations are near or past peak peak value. Yet, what I believe is that the Middle East, especially the UAE, is significantly undervalued. And and, you know, the the logic is quite simple. You know, UAE is a AA sort of credit economy when the UAE issues, you know, instruments to the global capital markets, they get a Double-A sort of cost. When we go to market as a triple-b rated company, we get a triple B cost. If you look at public equity markets, the equity markets of A or the valuation of a telco in the Middle East versus elsewhere, it's roughly the same multiples adjusted for growth. But when it comes to private equity, valuations of real estate assets, a comparable commercial grade asset performing very well in Dubai would be on average, 40 to 50% cheaper than a comparable asset in Hong Kong, Singapore or London. I think there is a bit of disconnect there. Yields are very high and if you believe in the thesis, as we do in measure 14, that we're on the cusp of a golden age for the Middle East, you would see yields perhaps continue to decline slightly. But because of the significant growth, we see significant runway for valuation growth in Dubai, UAE and the Middle East way past the current. The current peaks, so slightly different. Very fortunate situation I have.
To say. Yeah.
Yeah I think I would say I have to I would also have to disagree because I think if you look at the total shareholder return for Iron Mountain over the last three years, we're one of the top both in the S&P 500 and in the REIT index. We're in both the S&P and the in the Reid index. But that's really driven by first and foremost, the the traditional side of the business. The box that I said is that continues to grow. It even grew during the 2008 global financial crisis. So, you know, our rental income just goes up year after year in that business doesn't grow fast, but it grows. But more importantly is the data center segment has clearly outperformed. So, and I think that's been a standout. And we don't really see much of a slowdown because of the demand for digital infrastructure across the globe.
Are there any other standout subsets other than data centers that are worth highlighting for, for upside potential for?
Antonio mentioned it, but our highest conviction is living. And that's that is the case globally. You know, we are significantly under-supplied living and and residential in pretty much every market.
And oh, sorry.
Go ahead. Well it does you know how you attack it I think does depend on the market. For example, you know, we're, leaning in heavily on student housing in Europe and the UK in particular. But multifamily and lot development in the US. And so, you know, it does depend on the market, but that is our highest conviction globally.
Yeah. And I mean, there are sort of various levels of, you know, quote unquote, housing shortages all over the place. Certainly in parts of the US. None of you guys are homebuilders. So there's, you know, we can't deploy you directly, for this challenge.
Well, we do build a few homes.
Oh, you guys do. Okay. Are you going to come build some houses in the USA? We we we need them, I think. But where do you think there's kind of a role for you guys to play to? I don't know, spur more investment or. I'm just wondering, like where you would come in, you know, to that problem and also in a way that's economical and like has ROI for you.
So if I, if I build on this living sector. So I'll take the UK first as an example. So there's certainly a lot of shortage of housing in the UK. The biggest issue which we've been working with the government is actually how difficult it is to build sort of planning permissions, etc.. That's now improving. And, and there is a tension. Everybody knows that there's a shortage, but then there's at times a tension with the local communities because more housing needs to be built, but not here kind of thing. Environmental concerns also need to be balanced. And and so we've found that actually we have more capital that we would want to deploy than what we can actually build, meaning we building through, through other people. But we've just done an announcement of, you know, everything is in billions, but another 2 billion of investment in the UK, which is around 10,000 mostly affordable homes. But to your point, I see the yield because we need to think about the policy holders that own our pensions. We need to. So it's, everything we do is investment grade credit. So it needs to be very sort of long term. But with the right yields. And we continue to see we've developed this business for for quite some time. And actually student housing built to rent. Those are asset classes that we're continuing to to invest. But we need to work with local authorities, government to make it easier. And I'm sure this is true, but different in many different geographies to be able to continue to build. And in the US we do mostly multifamily actually. That's that's what we do.
So we're more focused on single family build to build, to sell. We we like that business. We're very lucky to be operating in a very friendly regulatory framework where we build homes in Dubai and the UAE. So that's a business that we started in 2020, actually at the height of the pandemic, because we had the conviction that, as you know, people stay more and more at home. The home becomes more and more important. You'd want more space, better amenities, etc. and I think that continues to be the case. The home becomes a very, I would say, central part to living, especially for family living in our part of the world, with average family sizes that are a bit larger than than elsewhere on multifamily and build to let, we're a bit more cautious. And and I think that obviously varies from market to market and location to location. But if you look at one of the big macro trends, with the cost of living crisis in many, many economies, and also I would say the concerns around the and you see it in the Edelman Trust Barometer, this continuous sort of feeling of distrust by by default, there's a big risk that governments would eventually listen to concerns about cost of living, cost of housing and intervene. And we're already seeing that in the US with sort of banning. I mean, President Trump has essentially banned investment in single family homes by institutional investors. And you see that trend perhaps carrying everywhere. So we're more focused on build to sell residential and more comfortable with build to lease in commercial and shopping mall assets. When we're dealing with sort of commercial counterparts rather than, you know, societal issues, that could be quite challenging.
Yeah. So what is the group think the impact would be if there's an executive order that President Trump announced and he teased it a couple of weeks ago about banning investors from owning single family homes. We don't know if Congress is going to act or if this will, in practice, have be a thing. But what do you think the impact would be just on the market and its entirety, kind of any sort of knock on effects.
More people and capital coming to the UAE, which is always welcome. In a continuation of the trend, migration, migration of capital and talent to to where it feels welcome and sort of, most, most productive. But but I think it's all of these crosswinds. I mean, you don't know. Yeah. And and that's why I think strategically we want to stay away from asset classes and markets where we think regulatory predictability is not that high anymore. And again, we keep sort of advocating for the Middle East, largely because of that predictable regulatory environment that allows you to invest for the long term. Real estate is a very long term play.
Bill or Laura, what do you think about the impact of the.
I mean, I can probably, speak into it. You know, I'd say it's frankly a very small segment of, of the asset class. And so in terms of immediate impacts, I don't know that I see a massive one. You know, our perspective is that, to address affordability, we need to build. And, you know, that's the solution. And so, you know, it's it's it's a hard it's it's easy to say, hard to do. But you know, that that really, I think is the opportunity is to, you know, to build, build housing, which ultimately brings the price down for everyone.
And we need more multifamily as well, which wouldn't be impacted. But that often can be more on the like lower end of the spectrum price wise. You know, for an individual to buy a multi-family. Yeah. An apartment. Yeah. Bill, any thoughts?
Well, we're, you know, we're strictly B2B, so 950 of the fortune 1000 are our customers. So, and so, you know, we have the benefit, as you say, is that, you know, when we're leasing data center capacity or we're leasing out industrial real estate capacity through our document storage side of the business is those are all very, very large global companies.
All right. Well, let's switch gears and talk about AI and data centers because it's Davos and it's 2026. And in either of those two things you have to talk about AI. But I guess to start with data centers that's obviously becoming, as Bill mentioned, a much bigger part of investing in real assets. It's also powering the economy. So why don't you just talk about your kind of thesis at your firm, Bill, how you look at putting your money in data centers, how it's you've said it had a big impact on your returns, obviously, the last couple of years. So kind of what's your top level insights there?
Yeah, it's a great business. I mean, we've been in it for a long time, but we've been in it actively, I would say, in terms of really growing the business for about 12 years. So, so we've been in it before the, I would say the AI hype. So I mean, just to be clear, there's a lot of need for digital infrastructure in terms of cloud and the cloud. The cloud providers are our largest customers. Right. And so AI is now becoming a bigger part of their load. And obviously with the advent or the increased growth on artificial intelligence, is that the power consumption goes up and the way data centers work, it's not about square meters or square feet. It's about the amount of power that you're bringing into the building. So that's the the key driver in terms of what we read. So, you know, our rental rates are based on dollars per kilowatt hour. Right. So that's how the business operates. And it's partly because if you think about building a industrial shed or a piece of real estate, you're probably somewhere between 50 and $100 a square foot. Data centers are north of $1,000 a square foot. And the difference is, is the equipment we put inside that can handle the power, provide the cooling and guarantee 100% uptime of that asset. So, you know, our our SLAs are such that or service level agreements is that we have to provide 100% uptime in terms of the asset. So you know, AI is clearly a tailwind. I think the next thing to just to to recognize is kind of what I would say, three big segments. There's corporate that are trying to get out of their old data centers, and they come to us to rent space. They put the equipment in. We don't we don't run the IT equipment in any of our data centers. We provide infrastructure as a service. And those folks go in and they'll provide their own loads. Obviously, even the largest corporate customers are now shifting more and more to the cloud. So they most of them have a cloud first. So you can imagine over 90% of our leasing activity these days is to the big public cloud companies. Those are our largest customers because they generally build about half of their own capacity, and they come to people like ourselves and our competitors to build the other half. So then that's really historically where a lot of the compute and the storage goes on in these public clouds. But more and more, they're actually growing and putting more AI loads, which they call inference, which is where the models run in terms of those AI models. And that's obviously driving both the need for more capacity and more power to be able to do that. And they put that closer to the edge to reduce the latency. And then the other part you hear Stargate, we don't play in that segment. Stargate is a slightly different model. So the part that the two segments I just said that has to be 100% uptime. So we have high levels of redundancy in our data center, both in terms of electrical equipment, cooling equipment, generators, in case the power supply gets interrupted on the large language models. These are these giga plants and they're the location is much more driven by power availability. And it's and they don't have to have the same level of 100% uptime. So that's kind of where the large language models are built. But our business is much more latency is important. So because it's closer to where people are actually consuming and computing, the location to talent, because people need to have the IT staff to go in and maintain the IT equipment that that's inside the buildings that we lease to them. And then the power availability, which is one of the biggest constraints right now. So what you will hear when we first got into the business, it was about latency and where there was both lit and dark fiber to actually connect your data center. Now everyone's talking about is there enough electricity? And to give you an example, our campus in Northern Virginia. So we have campuses across the globe as far east as Singapore, across the Indian subcontinent, across a number of countries in Europe and then across the United States. But if I just take the 350 megawatt campus that we have in Northern Virginia, which is the largest data center market in the world, that's about a third of a nuclear power plant on a little over 120 acres. So 120 acres of land. We're absorbing a third of a nuclear power plant in Northern Virginia is over two gigawatts. That's over two nuclear power plants. And for those of you that go in and out of Dulles, ours isn't near Dulles. But if you look down, it looks like these big warehouses. But you see, it looks like a bunch of big boxcars parked next to them. Those are those are data centers. So you'll see them all over the place.
Maybe just to to add to to Bill's point, I think absolutely. There's therefore there's a scale dimension like normal real estate developer or even just the size of the plot and how difficult it is to do. If I take an investor perspective first, I have to smile, because last year, you know, it was all about AI. This year is all about AI on steroids. So on on the on the premise that you sort of normally get the Davos consensus and do the opposite, you need to be careful, but I agree I agree with Bill that. So we've we've done investments in data centers early for our own sort of annuity book. And now what we've done is to launch those into a fund for investors. We sort of had a first close of €600 million. And that was data centers in the UK, data centers, some share in the US sort of align, data centers, 34 data centers across across the US. So to your point, it's the demand from an institutional investor perspective is absolutely there. Right. So everybody's is launching, data centers and funds that are digital infrastructure more broadly. To your point, data centers themselves, fiber energy generation. And we absolutely see the the capital coming in from an institutional perspective and wanting more more of at the moment. What's difficult is to find the assets themselves and and the data center. So despite what I said, I think it's still a very good asset class to invest in.
Maybe.
Thank you.
Maybe I'll give a little bit of a different perspective. You know, as Bill was pointing out, I think the the bottleneck right now is power. And so we've been playing in a slightly different part of, the stack and focusing on powered land. And, you know, from our perspective, it's looking like there needs to be another 150 or so gigawatts of power in the next 4 to 5 years. And, you know, that equates to about 2,000,000,000ft² of powered land, which, you know, obviously is a is a big opportunity. I think we've been playing in Europe in particular, where, you know, having local teams on the ground with, you know, a lot of, ability to source and, rezone and entitle land for power and data. Has been a big opportunity. And, you know, I think, feels like a has been a lower risk way to play in the space for us.
I think it was just to perhaps try to bridge also the different points from an industry or a portfolio perspective. This is great news because whether you are shopping in person, shopping online, or an agent is doing the shopping on your behalf, there's a real estate play somewhere between shopping malls, data centers, living. So that's great news. And equally, if you're working in an office or working remotely or an agent is doing the work for you, that creates demand for real estate. So I think from a portfolio and industry perspective, this is fantastic, fantastic news. And I think for our region as well, you know, land, abundance of energy, availability of capital also plays into that equation very nicely. And we see it unfolding in, in the UAE in a very meaningful, meaningful way. There is one, I would say uncertainty. The demand is there. The trends are clear. I mean, the question is about sort of technological, I would say continuity and perhaps obsolete. So I'll give one example. The Ethereum blockchain prior to 2021, used to consume as much energy as the country of Finland just to verify transactions. And between one day or the other, they managed to change the algorithm to a proof of stake, very more, much more efficient algorithm. And that dropped the energy consumption for Ethereum globally by 99.97%. So if you're hosting the Ethereum blockchain, the economics change very quickly. And I think one thing that and I'm not sure what the answer is, you are closer and you can provide sort of perspective on that. What don't we know long term about technological advances. And quantum is always around the corner. What would that do to space requirements, energy requirements for these massive data centers for which for the foreseeable future there is certainly significant demand.
Yeah. No. Look, I think the, you know, you always worry about in any real estate asset class about technical obsolescence, to your point. But I think if you if you look at data centers and the consumption of data, you always have certain areas. You know, I'm an old time mechanical engineer, but I learned on Fortran, right? I mean, the compilers, you know, we go through these things in terms of the efficiency of compiling the your code. And you're always going to go through these things. And we've had a number of the Ethereum moments, I would say over the last five years. But if you see the increase in demand for power with compute, that correlation is very strong. The slope may change slightly, but it's it's upward and to the right. Right. So no matter how you actually do that, I kind of wish that we had more of what you're saying, because the big issue is you can't get enough power. Right. And you I would say especially in the United States and, and in Europe now, the US administration is trying to tackle the large language, but they're focused on the large language model campuses. Right. So they're talking about sometime putting smrs but putting at least large gas fired plants next to these because, you know, gas fired turbine is maybe 500MW. You put 2 or 3 of those, you get a Stargate, right? So they can do that in those large, you know, tracts of land where we live is closer to where people live and work, right, because of the latency demand. So, you know, we're building out a campus of 250MW in Richmond, Virginia. So, you know, the southern part of the state there, there's not enough electricity. And you start getting into it becomes a populous nation because all of a sudden people see their electricity bill going up and they say it's those big bad data centers. The reality is, is that you take the United States, you take Europe is we have been asleep at the switch in terms of electrical infrastructure for 30 years, not three years, 30 years. If we look at that same period of time, China, because of its development cycle, you know, obviously it was, you know, started off as an emerging nation. It was been been building grid and generating capacity all that time. So our utilities don't know how to do it. And our regulators are afraid of them doing it. Right. So you have a situation where it's kind of like people who are running utilities now that have never really significantly expanded, either the grid or generation, and grid is actually more of a problem than generation. So what's happening now is, you know, it was you know, democracy is a wonderful thing is, you know, all of a sudden people are complaining about the electricity bill. So it must be we used to have governors opening our data centers. Now they know where.
To be.
Because all of a sudden it must be those guys that are causing it. We're not causing it. We're one of the cheapest consumers because we build our own substations on the site. So so we bring in the highest voltage into our data center campuses so that it's as efficient as you possibly can on the transmission, much more efficient than in local residential demand.
But it's.
Interesting because but but the problem is, is they're putting a tax now on the data center. So what happens on real estate class. The only thing I'll just finish on that if we're not careful is, you know, just like people say, you can't have steel mills now in Europe or the United States because of the electricity costs, they're effectively going to build a tax on that. And places like the Middle East, which is much more the government understands it's a partnership because data centers are infrastructure. They're not a real estate class in itself. It's part of the digital infrastructure that allows to improve everybody's life. And it's very different. If you go to the kingdom, for instance, in Saudi Arabia, you go to the UAE. They understand that it has it's a national good to provide the electricity so that we can have residential housing at affordable rates, and we can have data centers. But but the notion that a utility, the minute they expand grid or they expand generation gets 9% return on assets. I wish I was in that business and that and that effectively, they're shifting that onto the data centers even before we need the power.
Just one thing as an investor into Ahmed, to both of your points, we're talking about technical obsolescence. But when I look at it as an investor, there are other aspects of that as well. One is clearly energy. So you may if you're then in the right place close to the grid. And I think in the UK again, working with government and authorities to to have the right completely agree at that point. The other one is location itself. I prefer to have the slightly wrong box in the right location, rather than the the perfect box in the wrong location. And, and there is that sense of what's the as an investor, what's that obstacle, that risk that we've always had in any investment from a real estate perspective? And when we see it from a technological perspective, there's also what are the things that you must have versus the nice to have. So in a lot of a lot we do a lot of urban regeneration. So we have a 4 billion partnership with Oxford University. So a lot of this to your point is, is an extension of that's that's more on the real estate end of the spectrum. It's kind of what what is from a technological perspective, what's the must have versus the nice to have that to be honest, in two years time was probably completely irrelevant even in the living space, right? Because people really want it in their built to rent something specific that now we've invested in and we're not getting a return for. So I think about obsolescence in a, in a much broader, much broader sense.
I think what Bill outlined, you know, the situation with the energy infrastructure in the US and Europe is something real. It will take some time to, to be fixed. I mean, 30 years doesn't get fixed in, you know, three quarters. And there are a couple of ways this could play out. I mean, one is indeed, you know, migration of capacity and investment to places where you have abundance of energy, land and capital. That's but then you have the latency challenge. The other way it could play out is that this could provide a fantastic incentive for more Ethereum like moments. This provides a significant incentive.
For innovation.
In the system, for innovation, for new technology that would significantly cut down energy requirements or significantly cut down sort of CapEx requirements. And I'm not sure if that's quantum or something else or something in between. But if that situation persists, then there could be significant innovation around the corner to to overcome it.
I think that there is some on the what I call on the margins. So for instance, we have a Doe grant to put batteries on the 350 megawatt campus in Northern Virginia. So why is that important? So we were the founder of this thing called the Green Power Pass. So we buy on power purchase agreements, more than 100% of what we use in data centers globally. So it's our customers won't pay an extra cent for that, but we're able to do that in a way by buying renewables at very affordable rates. Right. And we were the second signature on the 24/7 pledge. So to make sure, you know, obviously we're not building a data center in North Dakota, North Dakota, but but we now are over 60% where we have the right renewables at the right time of day and the right grid. Right. But to your point, by being by there's still a lot of renewables that's wasted, right? By building batteries into the infrastructure is you can start smoothing some of those peaks to do this. So there's some things gas generation you probably saw the debate in Europe is the Germans said to the French, we're not going to call nuclear green unless you call gas green. Now you say, well, doesn't make any sense. Well, if you actually look at it in Holland, is actually trying to get people to build more gas generation in Holland, it's one of the largest, mixes of renewables because to be able to bring more renewables into the grid, you have to have something you can turn on and turn off very quickly. So it's effectively acts like a battery, right, or an absorber. So there are things I think we're going to have breakthroughs there. But the regulatory thing is, is don't forget is even when you look at behind the meter, we're looking at behind the meter solutions, you know, I said 350MW. We will. If we could get a gas turbine, it would probably should generate our own electricity on the site and sell it back into the grid when we don't need it. But the utilities come back to, they get 9% return on assets. They want more assets. So you have to have a local regulatory environment that's willing to go to war with you on with the utilities, but it's also more efficient because you really want generation next to your biggest customers, right? If you think about, you know, because there's such transmission loss. So it makes sense for everyone. So I do think there's some things that we can do that's going to bend the curve. But but it's not just our utilities aren't used to doing it. Our regulatory and, you know, the political structure that we have, is not used to the, the trade offs and decisions they're going to have to make. And, and I fear that populism, in the absence of facts on the table, populism creeps in in that drives some of the decisions.
Yeah. And do you see the calculus changing even more going forward? We have seen plenty of examples across the US where local communities, you know, push back against data centers. There was a deal announced by Microsoft a couple of weeks ago where they said, we're going to do this, this and this. We're paying full price for power. We're not asking for tax breaks, stuff like that. How do you see this continuing to change the calculus on the investing in data centers?
Well, we're kind of probably, you know, kind of the, the, the meat in the middle or the, you know, getting squeezed because Microsoft can do that on their own. Right? And they, you know, they they can do that. But Microsoft on the 50%, they come to us to build, they're not going to pay extra. So you know, so that's what I say. So it's kind of it's kind of interesting. And to your point is, you know, we we were one of the first to go into Prince William County, right? It's Northern Virginia. We had we had two congressman, U.S. congressmen, and we had, two people from the local, commission or council from the for the county. And we had the governor of the state at the time, who came and, you know, more than half of them Democrats. So it wasn't a bipartisan it was a bipartisan thing. And because we were building high tech jobs on the construction side, not a lot of jobs on the operation side, so they didn't have to build schools and roads, which was really good. And they get tax revenue. Right. So it was like really good. But to your point now it's you know, people are kind of making a correlation that, okay, my utility bill is going up because we underinvested in the grid and we have to guarantee the utility is 9% from the day they put a shovel in the ground. So then they they come after us. And that's where I'm a little bit worried is they say, well, we can afford to tax those guys because they're making a lot of money. The steel companies were making a lot of money. They're not.
At one time in the past.
Yeah. Yeah. So that's that's why that's the thing I'm concerned is you do not want, you know, we're we're a publicly listed company. You know, I'm very nationalistic. I'm very patriotic. I grew up in the United States. I started off my career in the government. But I get paid based on my returns because I have shareholders like you. Right. So if if all of a sudden they make it unattractive and they create a tax that I can't get the returns in the United States, I'm going to go to the Middle East, I'm going to go to Asia, I'm going to go to India and put all my capital there, which means that the United States is going to fall behind on digital infrastructure. And I think everybody knows for us to be competitive in the AI race, we have to have infrastructure.
Yeah.
Can I add the point beyond AI, just because I think all of which I think that's true more broadly how we're investing. So we we we did some research with Oxford Economics called blueprint for growth, where we looked at all the actions in the UK where the six six levers I want to take you to. It's a great read if you want to read it, where we said that we those levers that the government has pulled, some of them could add £220 billion more to the GDP of the country. So to grow the country, the biggest lever was around planning and planning. And so allowing, allowing construction. And that is a controversial thing even beyond, data centers. But if local communities see the the actual return to those communities, there's more affordable housing, there's productivity. I think there's a narrative that's not just, you know, a capitalist corporation. It's us helping in in many cases, in our case, the money that is in our funds are the local government pension scheme. So it's your money invested in the, in the local community. And I think we as CEOs need, need to tell a better story of that. Of course, we need to work with local authorities and government. But I also take that responsibility that this is we're doing it with the right returns. I also have shareholders, so I need to think about it that way. But it is there's a clear win win that if we can do this properly. And I think growth is the answer to that.
And I think just to tie in some of the themes that we're probably all hearing this week, you know, in a world of deglobalization and geopolitical uncertainty, I think, local governments need, need to turn in and figure out how to build their own infrastructure, how to, you know, build resilience, etc.. And, you know, I think that is going to require, a lot of that partnership, if you will, and, and investment, you know, I think, there this the physical economy is the backbone on which the broader economy runs. And, you know, I think that this is going to be a big opportunity for the physical economy because of that.
I think that is a great spot to end the panel portion of the discussion and open it up for any questions. Does anyone in the audience have any questions for our panelists? This is your chance. All right. Well, we can wrap it up, then. Oh, we have a question.
Thank you.
I know it's Thursday afternoon.
So we've all had a few late nights.
Yes. Any, any lessons or, things to appreciate as far as places like India and developing countries are concerned, to play catch up with parts of Western Europe and North America.
So. Well, thanks for the question on India. So you know, we we're across Mumbai, Chennai, Bangalore, Hyderabad, Pune in the capital region or Delhi. So it's a it's an important it's the only country that reports directly to me, not just because of the data center opportunity, but just generally what's going on in India. I think that I can't go to a meeting like this, or when I go to India and not have a chief minister, in charge of one of the states, want to meet to have a discussion on how they can become more attractive for us to invest in data center in their, in their area. And I think just to give you what's happened, I would say that India is already being quite successful in that pursuit is when we started looking at investing in India in 2017, the head of data center and I traveled across India for seven years until we found the right partner to enter. Because sourcing land is is, you know, takes a skill set that you you need to be very deliberate about. You know, obviously. But at the time, in 2017, there was 200MW of critical load it load in all of India. And at the time, Northern Virginia alone was 1.5GW. But they passed legislation to say that a lot of the critical data and sensitive data for Indians as consumers, whether it's PII information or other data, had to be onshore. So you could see the the tidal wave coming and now you're over two gigawatts, right. So you see that kind of growth that's already going on in India. And I think it's because the state governments and the and the the federal government or the national government have made a very deliberate answer to intention to build infrastructure, both in terms of telecommunication and fibre, but also power. And it's one of the places where you can't go into a conversation with a state minister or a customer and not talk about renewable powers, because renewable power as well, because India has made a decision, it's not just through conventional power that they're going to keep, you know, keep up with the growth in the need for more and more data center. But the actual build out of renewable is super important. So I haven't had one conversation in India where power is a long term constraint. Yeah. There are some places where, you know, Mumbai, I'd like to get it quicker, but there's always a solution on the table to get us more power. So I think India is well placed. I mean, it's a very competitive market on every segment, including data center. So it makes you better. Has as a company, I also think India is actually growing at a very virtually all our, suppliers for switching equipment generators, cooling our manufacturing in India. So we're also looking at India has a place where we can buy equipment there and use for other data centers around the world. So I think, you know, I think India is, is doing a lot of things right. And it's a very large democracy, but it's functioning well.
Just one small thing on that. So I'd beyond India because you said other markets. One thing I've seen. So half of our AUM is outside the UK. So we're really global asset manager. A lot of these challenges are very similar. So when I talked about that blueprint for growth, it's true that the local conditions are very massively per country. But I think in this new world. Laura, to your point about what we're hearing this week, how different countries align with each other on some of these challenges and how we as corporations solve those challenges. They're pretty similar roadmaps. So I was looking at this from a UK perspective because this is our biggest market. But when I travel around the world, some of the US challenges are not dissimilar. Some of the challenges in Asia are not dissimilar. Obviously, we're not as big in the Middle East, but but I think there's a similarity to the the catch up story in many of the different economies.
And there.
Are and by the way, the physical economy is back, which is the name of this title everywhere. And so I. think exactly exclamation point.
There are asset classes where it's actually the reverse, where, you know, emerging markets including India and the Middle East are ahead. I mean, you look at hospitality assets, new hospitality assets, you look at shopping centers, not just in terms of, you know, because they're new assets and aesthetically more contemporary or modern. You also look at the use of technology in terms of creating cognitive campuses, smart cities, etc.. So I think there are also areas where perhaps our markets are leading in in different ways.
I can just add India is one of our biggest growth stocks. I mean it, we've been there for almost 20 years and it's been, you know, it was challenging to operate early on. But you know, the growth that we're seeing there I mean the talent in in India is attracting some of our our biggest tenants there. You know, the office development that we're doing, the residential development we're doing is incredible. I think it's an incredible place to be invested.
Great India.
We are out of time. Thank you to each of you for a really great conversation about the challenges and opportunities in data centers, housing, and other areas of real estate. Very enjoyable conversation for me and I hope everyone here and watching live felt the same. Thank you Kate.
Thank you Kate. Thank you guys.