Too much value and capital are being “amassed” in the data centre sector, according to Andrew Coombs, chief executive of FTSE 250-listed business parks owner and operator Sirius Real Estate.

Speaking at Lockton’s Industrial & Logistics Seminar yesterday (30 June), Coombs said his firm was planning to “stay as far away as we possibly get” from data centre development, fearing the market was becoming overheated.

He said the recent hype around AI and data centres was reminiscent of the dot-com boom of the late 1990s and the period just before the global financial crisis in 2007-08. In both events, there had been a “shift away from companies making profit and underlying cashflow” towards companies being “valued on how many users and customers they had”, Coombs added.

A study by consultancy Barbour ABI, published last summer, revealed there were 94 data centres under construction in the UK, worth a combined £36.4bn.

Coombs said: “The values of data centres, some of them not even built yet, are going up 50%, but what happens if that goes down by 20%, 25% or 30%? That to me is really worrying, because the time from now to delivery is many years away.”

In the meantime, he said, alternative ways of delivering data centres, such as building them under the sea, might emerge.

“Too much value and capital are being amassed around this thing [data centres],” said Coombs. “If this collapses, goes wrong or devalues by a material amount, I think you’ve got a similar event to the previous two events.”

He said that Sirius was actively targeting the defence manufacturing sectors in the UK and Germany instead.

“We believe where there is strong and urgent demand that requires industrial property you want to be in that sector, because that’s where people can solve problems with their wallets,” he added.