AI and real estate: from Regent's Place to outer space

Power is among the data centre sector's key constraints. 

In Europe, demand for electricity from data centres is likely to surge 150% by 2035, according to energy think tank Ember. Connections are painfully slow; it takes an average of seven to ten years to connect a data centre to the grid in legacy hubs. These constraints are pushing growth beyond those hubs into secondary markets, such as Johor, Bangkok, the Middle East and the Nordics, Stephen Beard wrote in Knight Frank's 2026 Data Centres Global Forecast Report.

We learned a lot this week about another emerging market – one without power constraints – space. 

"The Sun contains approximately 99.8% of the solar system’s energy and, as a result, we believe it is the only truly scalable solution to terrestrial energy constraints in the age of AI," Elon Musk's SpaceX wrote in an IPO prospectus published Wednesday. "The logical path forward is to move power-intensive AI workloads into orbit, where solar energy is effectively constant."

The company envisions launching "millions of satellites" to support orbital data centres able to handle energy-intensive AI workloads "at a far greater scale and efficiency than terrestrial alternatives."

New frontiers

If, like me, you first imagined a space data centre as a big box on the Moon, you would be wrong - at least in the first instance. In the case of SpaceX, orbital data centres would constitute dense constellations of satellites, each carrying chips, solar panels and cooling systems able to release heat into space. Nvidia recently published mock ups of a 5-gigawatt orbital data centre with solar and cooling panels approximately 4km in width and length.

Space-based solar arrays can generate more than five times the energy per unit area of terrestrial solar due to continuous illumination, lack of atmospheric interference and optimal orientation, SpaceX wrote in the prospectus. 

SpaceX expects to begin deploying orbital AI compute satellites as early as 2028, though it admitted that many of its plans, including developing orbital AI compute at scale, "involve significant technical complexity, unproven technologies... technologies that do not exist, and such initiatives may not achieve commercial viability." Still, if it were to be successful, the company views enabling "terawatt-scale" AI compute in space as merely a stepping stone in a much grander plan that includes deeper space exploration, industrialisation and a civilisation on Mars:

"We believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding spacefaring civilization that drives continuous innovation across new frontiers, ultimately propelling us to Kardashev Type II status," the prospectus concludes. "We believe we are capable of unlocking an era of unprecedented economic expansion, while also contributing to the safeguards of humanity’s future against existential risk."

We took a deeper dive into the broader prospects for real estate in space in The Wealth Report 2026 – you can find it on page 42. In the case of data centres, the Nordics is likely to remain a more reliable growth market in the near-term. Less exciting, but better for feasibility. 

AI clustering

British Land and Royal London Asset Management's Regent's Place has become an AI and innovation hub – last month Anthropic signed for more than 150,000 sq ft at Triton Square, becoming neighbour to the likes of robotics firm Humanoid and generative AI firm Synthesia. Google DeepMind, Meta, Wayve and others are clustered in and around the wider Knowledge Quarter.

These firms are among the most notable drivers of take-up in London's prime office market, and British Land is among the key beneficiaries. In annual results published Wednesday, the firm said leasing volumes across its office campuses were the highest in more than a decade as occupiers continued to expand their footprints across London, with activity focused at Broadgate and Regent’s ‌Place. British Land has around a 5% share of the London office market, but accounted for 15% of reported leasing activity last year, rising to 33% in the fourth quarter.

Landsec struck a similarly bullish tone last week in its annual results. Occupancy levels are running at a 20-year high and rents are rising at the fastest pace in nearly two decades, chief executive Mark Allan said. At its recently opened Myo Kings Cross, nearly 80% of all lettings have been to AI or AI-adjacent businesses and the building is on track to be virtually full only 9 months after opening, the firm said. 

More broadly, the firm cited ongoing adoption "of emerging technologies such as AI seems increasingly likely to act as a further accelerant of occupiers' focus on the very best space. Whilst back office and processing roles are likely to reduce, any impact of this in high value locations in London is more than offset by the creation of new roles (or indeed new businesses) enabled by technology, and new demand from international businesses."

In other news...

From our team: Anna Ward on the mixed momentum in Europe's prime housing markets ahead of the ECB's June rate decision. Tom Bill has a new Housing Unpacked podcast with Helen Thomas, CEO of Blonde Money. They unpack the political shockwaves around Andy Burnham’s attempt to become an MP, the growing tension between government policy and bond markets, and what it means for mortgages and property prices.

Elsewhere – UK's Streeting, eyeing Labour leadership, wants changes to capital gains tax (Reuters).