This article was produced jointly with Dividend Sensei.
REITs are a great asset class, not only to generate safe and growing returns, but they have historically still achieved market returns with low volatility. However, REITs are not just boring and conservative income investors seeking to benefit from the steady rents of office and retail properties. There are more than a dozen industries in REITdom, including exciting and fast-growing industries such as data centers.
Let's take a look at why you want to own data center REITs in general and why Digital Realty Trust from the Blue Chips industry (DLR) and especially Equinix (EQIX) are worth buying today.
Why You Want to Own Data Center REITs
Cloud computing is one of the biggest economic megatrends and you can not store huge amounts of exponential data without data centers
(Source: Presentation by the DLR Investor)
According to analyst firm IDC, around 25% of global IT spending on cloud computing transitions is currently used, but this is likely 5G will bring even more data as the Internet of Things increases.
Ericsson estimates that by 2023 alone, nearly 3.5 billion devices will be connected to the Internet, including driverless cars.
According to Forbes, autonomous cars will generate approximately 4,000 GB of data per day, which is approximately 2,500 times what it is today.
(Source: Nvidia Investor Presentation)
And, according to analyst forecasts, by 2035, there could be 120 million driverless cars on the road, generating vast amounts of data needed to be stored and analyzed , about AI-driven algorithms stored on data center servers. And these are just a few of the key growth catalysts for this exciting and fast-growing industry.
(Source: EQIX Investor Presentation)
And when it comes to cloud computing, Equinix and Digital Realty are the two heavy industry heavyweights.