Storing Physical Cargo vs Storing Digital Data
Lukas Mardhi, Head of Property Spil Group, Director Spil Logistics Properties, Pt Salam Pacific Indonesia Lines
Lukas Mardhi, Head of Property Spil Group, Director Spil Logistics Properties, Pt Salam Pacific Indonesia Lines
Lukas Mardhi is a C-level executive with expertise in real estate, supply chain and capital markets. Currently Head of Property at PT Salam Pacific Indonesia Lines, he has led teams across family-owned firms and multinationals. Known for his belief in simplicity and teamwork, Mardhi brings a people-first approach to business transformation and innovation across logistics and industrial real estate.
In the race to support an increasingly digital economy, data centers now have step into the spotlight, not only as infrastructure, but as a fast-rising industrial asset class. The once simple four walls warehouse is undergoing a transformation, giving rise to an unexpected new demand in real estate. As the digital economy expands, data centers also emerge as a high-value industrial asset class. Traditionally, warehouses have been the backbone of supply chain operations, but with the surging demand for cloud computing, AI processing and hyperscale storage, many are now being converted into data centers. This shift is mainly driven by urban proximity, infrastructure advantages and the need for faster deployment.
Private equity has been favoring logistics real estate as a reliable investment for years, despite an e-commerce increasing demand in logistics (although in lower pace compare to few years ago), investor starting to open up to the data center industry as an opportunity for growth. Hence these firms are playing both sides and looking to tap into data center sector at the same time in an effort to grow further, even if both sectors might have competing demands for the same sites. The transition from logistics-focused real estate to data-centric properties is driven by several key factors:
• Explosive growth in data demand
According to DataCenters.com, global data center demand is expected to grow by 15 percent annually, with enterprises racing to secure scalable solutions.
• Strategic location benefits
Warehouses are often situated near major population centers, offering access to fiber connectivity, power grids and permit to operate data center as mostly located in industrial zoning.
• Faster time-to-market
Constructing a new facility can take two to three years, while converting an existing warehouse can cut that timeline.
The trend of repurposing warehouses into data centers is accelerating as real estate developers recognize the potential for higher returns compared to traditional industrial leases. Many logistics firms are strategically reviewing their property portfolios, identifying assets suited for conversion based on factors like power infrastructure, structural integrity and connectivity access. Developers are prioritizing markets with strong fiber-optic networks, proximity to major business hubs and available power capacity, ensuring that properties can support high-performance computing needs. This shift reflects a broader industry movement where logistics companies are integrating data-driven asset management into their long-term strategies.
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Data centers are now viewed not just as infrastructure assets but as high-yield industrial investments attracting both traditional real estate investors and tech giants
While repurposing warehouses into high-performance data centers is an attractive proposition, several architectural and engineering hurdles must be addressed:
• Power supply
Many warehouses were originally designed for storage and distribution, not for handling the demand of massive energy loads required by servers. On several major cities there will be limitation on how power it can acquire, example for Jakarta (Indonesia) the maximum power load will be 30 MW for outside industrial estate.
• Social risk
Not all warehouse locations are ideal for data centers. Some properties are too close to residential areas, raising concerns about noise pollution from cooling systems and backup generators. Others may be near gas stations or public utilities, creating safety risks and emergency planning.
• Connectivity risk
Fiber optic infrastructure is super critical requirement for data centers. Hence depending on location some fiber optic may have close connectivity towards the site. Otherwise, it might require major investment in connectivity, potentially eroding financial viability if the cost outweighs location benefits.
The rise of warehouse-to-data-center conversions is reshaping the industrial real estate sector. As noted by RICS (2025), “Data centers are now viewed not just as infrastructure assets but as high-yield industrial investments attracting both traditional real estate investors and tech giants.” Several key investment considerations include on Return on investment (ROI), which data centers generate higher revenue per square meter than conventional warehouses, with longer term of leases that create attractiveness. While energy & sustainability concerns still a consideration hence the push toward green data centers leading to increased adoption of solar energy, AI-driven cooling, and carbon-neutral operations.
As the digital economy expands, data centers will become an integral part of industrial asset portfolios. Warehouse conversions offer a fast-tracked, cost-effective solution to meeting growing tech demands, signaling a major shift in how industrial spaces are utilized.
