Power Is Becoming a Commercial Property Consideration

For years, commercial property decisions have largely centred around familiar factors such as location, access, zoning, land availability and rental or purchase costs.

A new consideration is becoming increasingly important for certain types of commercial development: power availability.

The issue has become particularly visible in the US data-centre market. The CRE Report recently highlighted how electricity supply is becoming a constraint on new data-centre development, with power availability increasingly influencing whether a site can be developed economically.

From location to infrastructure

Data centres provide a useful example of how infrastructure can influence property decisions.

The facilities require significant and reliable electricity supplies to operate servers, cooling systems and other critical infrastructure. As demand for cloud computing and artificial intelligence increases, the amount of power required by these facilities is also increasing.

In South Africa, the same trend is beginning to have implications for the commercial property sector.

The Development Bank of Southern Africa estimates that installed data-centre IT capacity could increase from 435 MW in 2024 to 829 MW by 2029. The growth is being driven by increased cloud adoption, digital services, data storage and processing requirements, and artificial intelligence.

This means that electricity infrastructure can become an important part of assessing whether a particular site is suitable for a high-demand occupier.

South Africa's data-centre market

South Africa is already the largest data-centre market in Africa, with major activity concentrated around Johannesburg and Cape Town. Johannesburg has also been identified as a leading emerging data-centre market, with power availability among the factors influencing its position.

Recent investment illustrates the scale of the infrastructure being developed.

Teraco's JB4 campus in Bredell, east of Johannesburg, was expanded to support 50 MW of critical IT power load, including infrastructure designed to accommodate higher-density computing requirements.

Other developments are similarly being planned around access to large and reliable power supplies. Business Day reported in May 2026 that reliable bulk electricity is one reason relatively few South African sites are suitable for data-centre development.

What this means for commercial property

This does not mean electricity availability will become equally important for every commercial property.

For conventional office, retail, warehouse and industrial occupiers, factors such as location, transport access, building specifications and operating costs will continue to influence property decisions.

However, for energy-intensive users, infrastructure capacity can become a fundamental site-selection requirement.

This may increasingly require property owners, developers and occupiers to consider questions such as:

  • What electrical capacity is available at the property?

  • Can additional capacity be secured if required?

  • What infrastructure upgrades would be necessary?

  • Is there access to alternative or renewable power sources?

  • How reliable is the local electricity supply?

  • Are municipal and grid infrastructure capable of supporting the intended use?

A changing property equation

South Africa's electricity situation has also evolved. Eskom has reported a significant improvement in generation availability following years of supply constraints, while data-centre investment continues to increase. At the same time, industry research continues to identify electricity and water infrastructure as potential constraints on further data-centre growth.

The broader point is that infrastructure and property are becoming increasingly connected.

For certain commercial developments, having land in the right location may no longer be enough. The availability, reliability and scalability of the infrastructure serving that land can also influence its practical development potential.

As demand for digital infrastructure continues to grow, power is therefore becoming another factor worth considering when assessing commercial property opportunities — particularly for occupiers whose operations depend on substantial and reliable electricity capacity.


Source & Disclaimer

Original Source: Why Power Is Becoming a Real Estate Investment?
Publisher: The CRE Report
Published: 1 September 2026
Source: https://thecrereport.substack.com/p/why-power-is-becoming-a-real-estate

This article has been independently researched and written by Osher Property Solutions based on information and themes presented by the original source, together with additional South African market information from publicly available industry sources.

The article is intended for general informational purposes and does not reproduce the original publication. Readers are encouraged to consult the original source and referenced industry publications for further information.

Information is provided for general interest only and should not be considered financial, investment, legal or professional property advice. Appropriate professional advice should be obtained where required.