Key takeaways

• Data centre securitisation is emerging as an important complement to bank lending, private credit and infrastructure capital as platforms scale. Two structures dominate global issuance: commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS).
• The United States remains the most developed market globally, with annual issuance exceeding US$25 billion and approximately 20 active issuers. Major operators now access securitisation on a repeat, programmatic basis. Most transactions are currently ABS issuances, complemented by continuing CMBS activity.
• Europe is following the United States’ trajectory. Since Vantage Data Centres’ inaugural sterling ABS in 2024, four public data centre securitisations have been completed (two in the UK and two in continental Europe), totalling approximately €2.2 billion. Market forecasts point to €4-5.5 billion of issuance over the next year, despite structural constraints such as fragmentation across legal, regulatory and currency regimes, grid capacity and data sovereignty.
• Asia remains at an earlier stage of development. Japan is a partial exception, financing through hybrids of project finance, J-REIT and structured real estate. Singapore, Malaysia, Hong Kong and other markets remain sponsor-equity, bank-led and increasingly private-credit funded, with specialised GPU and computing-asset financings only beginning to emerge.
• Australia today resembles the position Europe occupied immediately before its securitisation market emerged: strong fundamentals (investment-grade counterparties, growing asset scale, deepening institutional ownership), but no established public data centre CMBS or ABS market. Future issuance is likely to require international structures to be adapted to local legal, regulatory, tax and operational conditions.

Earlier articles in this series looked at how data centre financing in Australia has evolved into a multi-layered capital framework, incorporating bank debt, private credit, infrastructure capital and institutional investment. As data centre platforms continue to scale, attention is increasingly turning to capital markets solutions capable of supporting large, long-dated funding requirements.

In more mature markets, particularly the United States, securitisation has become an important component of the funding landscape. Large-scale operators regularly access securitisation markets alongside traditional bank lending, enabling them to obtain funding from deep pools of institutional capital.

This article looks at how securitisation has evolved in the United States, Europe and Asia, and what those developments may mean for the Australian market. In particular, it explores the two principal securitisation structures that currently dominate global data centre financing: CMBS, which package mortgage-backed exposures against stabilised, income-producing data centre assets; and ABS, issued through master trust structures that operate at the platform level and draw on contracted revenue streams. The two articles that follow in this series look at each structure in detail.

United States market

The United States remains the most developed and sophisticated data centre securitisation market globally. Since the first large-scale transactions emerged in 2018, securitisation has become an established funding channel for major operators and a recognised asset class for institutional investors. Annual issuance has recently exceeded US$25 billion, with both ABS and CMBS markets playing significant roles. The issuer base has expanded considerably too, from a small group of pioneering operators to a diversified market of approximately 20 active issuers. Major operators are now able to access securitisation markets on a repeat, programmatic basis as part of their broader capital management strategy.

The predominant structures for completed and operational data centres are either single asset, single borrower CMBS or master trust ABS. CMBS structures are often used, but the great majority of transactions are now ABS issuances. Together, these structures now represent one of the most important sources of institutional capital for large-scale data centre operators.

The issuing entity in CMBS transaction is a New York common law trust, the corpus of which consists of the mortgage loan secured by a first priority deed of trust, assignment of leases and rents, security agreement and fixture filing encumbering the borrower’s fee simple interest in the financed data centres, together with all other tangible and intangible property owned by the borrower and all proceeds of the foregoing. The securities issued are pass-through certificates in several classes evidencing undivided beneficial ownership interests in the trust.

In an ABS issuance, the issuer is generally a Delaware limited liability company. The issuer owns the equity interests in other entities that own the subject data centres, including any related leases, subleases, ground leases, capital or similar leases as well as customer contracts and assets related to such customer contracts. Unlike in CMBS structures, the issuer may from time to time after the initial issuance acquire or form additional wholly-owned subsidiaries that own or lease data centres. Additional ABS issuance may occur from time to time upon the satisfaction of conditions set forth in a master or base indenture. The securities issued are classes of senior, senior subordinated or subordinated notes.

Each structure reflects a fundamentally different approach to credit and risk allocation, and together they serve two distinct but complementary investor bases. CMBS structures are generally aligned with real estate debt investors, with credit analysis focused on asset value, lease terms and mortgage enforceability. ABS structures, by contrast, are oriented toward structured credit investors, with credit derived primarily from contractual cash flows, diversification and operational performance at the platform level. The ability to access both investor bases has become an important competitive advantage for large-scale operators, enabling greater funding flexibility and diversification of capital sources.

European market

While securitisation remains less mature in Europe than in the United States, the market is developing rapidly and is increasingly being viewed as a complementary funding source alongside traditional bank lending and project finance.

The European market broadly appears to be following the trajectory previously seen in the United States, albeit at an earlier stage of development. The first public European data centre securitisation was completed by Vantage Data Centers in 2024, through a sterling-denominated ABS issuance backed by UK assets. Since then, four public data centre securitisation transactions have been completed across Europe (two in the UK and two in continental Europe), representing approximately €2.2 billion of issuance over a relatively short period.

This pattern mirrors the early development of the United States market, where an inaugural transaction was followed by a small number of transactions over the subsequent 12 to 18 months, before issuance accelerated materially. Market participants generally expect European issuance to increase significantly over the next year, with forecasts ranging between €4 billion and €5.5 billion as the investor base expands and familiarity with the asset class grows.

Notwithstanding this growth, Europe faces structural constraints that are less pronounced in the United States. Although often discussed as a single market, Europe remains fragmented across multiple legal systems, regulatory frameworks and currencies. This can complicate transaction structuring and portfolio aggregation, particularly where assets sit across different jurisdictions. Currency considerations also remain relevant in certain markets, particularly where assets are located outside the eurozone.

In addition, access to power and grid capacity has emerged as a significant constraint on development in several European jurisdictions. Data sovereignty considerations also play a more prominent role than in the United States, with some countries favouring local data storage and processing arrangements. These factors influence both the location of facilities and the deployment of future capacity.

The United States currently has a substantially larger installed data centre base than Europe, and is expected to maintain that lead. However, despite these structural differences, the long-term growth trajectory of the European market remains clear. Increasing digitalisation, cloud adoption and AI-related infrastructure requirements continue to support significant demand for new data centre capacity across the region.

To date, European transactions have predominantly adopted ABS structures supported by stabilised hyperscale-leased assets generating predictable contractual cash flows. ABS structures have generally been favoured by both issuers and lenders because they align readily with platform-level financing strategies and recurring operating revenues.

At the same time, banks continue to play a central role in European data centre financing. Data centres have historically been viewed principally as a form of commercial real estate rather than infrastructure, and bank lending remains the dominant source of development and stabilisation capital. While banks continue to support the sector actively, the capital-intensive nature of data centre development is prompting both borrowers and lenders to explore alternative funding channels that can supplement traditional balance sheet financing.

As a result, securitisation is increasingly being utilised as part of a broader financing lifecycle. A common pattern involves initial development funding being provided through bank facilities, followed by project finance-style structures during stabilisation and ultimately securitisation once assets have achieved a sufficiently mature and predictable operating profile. In this context, securitisation provides access to deeper pools of institutional capital and enables sponsors to diversify funding sources beyond the banking market.

Asian market

Outside Japan, securitisation of data centre assets in Asia remains at a relatively early stage, compared with both the United States and Europe. Data centre capacity growth across the region is among the strongest globally, but funding continues to be dominated by sponsor equity, bank lending and, increasingly, private credit. As a result, Asia has not yet seen the same shift toward programmatic securitisation structures that characterise the United States market, or that are beginning to emerge in Europe.

Japan is a partial exception. Rather than following a pure securitisation model, data centre financing in Japan has typically combined elements of project finance and real estate securitisation, supported by a mature J-REIT and structured real estate market. This has enabled Japanese operators to access a broader range of institutional capital than is generally available elsewhere in Asia.

Across other Asian markets, including Singapore, Malaysia and Hong Kong, financing remains predominantly platform-based and bank-led, although participation by private credit funds, infrastructure investors and alternative lenders is increasing. These markets are also beginning to see specialised financing structures linked to AI infrastructure emerge, including facilities secured against specific GPU and computing assets. These arrangements are already common in certain mature markets, but they are only beginning to emerge across parts of Asia, and currently tend to involve smaller-scale transactions.

In many respects, the Asian market currently resembles an earlier stage of development observed in both the United States and Europe prior to the emergence of active securitisation markets. While the underlying demand fundamentals are strong, many operators remain focused on portfolio expansion and asset stabilisation rather than accessing capital markets through ABS or CMBS structures. Consequently, private credit providers and relationship banks continue to play a central role in funding development and growth across the region.

As data centre platforms continue to scale and operating cash flows become increasingly predictable, the preconditions for securitisation, particularly ABS-style, cash flow-based structures, are likely to become more prevalent. However, legal, regulatory, tax and currency considerations, together with differences in capital market depth across jurisdictions, are likely to produce a more fragmented development path than that seen in the United States. Over time, larger regional operators may increasingly look to diversify funding sources and close funding gaps through securitisation, particularly as institutional investors become more familiar with digital infrastructure as an asset class. This may also be helped by the ability to classify underlying projects within portfolios as green or environmentally friendly.

Australian market

As demand for digital infrastructure accelerates in Australia, securitisation is increasingly being considered as a complement to traditional bank-led financing structures. Strong underlying fundamentals, including investment-grade counterparties, growing asset scale and increasingly sophisticated operators, are creating many of the conditions that supported the development of securitisation markets elsewhere.

Australia has not yet developed an active public data centre securitisation market comparable to those in the United States or Europe, but market participants are increasingly assessing how securitisation structures might be adapted to local conditions. Any existing or future private, warehouse or bespoke transactions are likely to represent an earlier stage of market development than the established, repeat-issuer markets that now exist offshore.

Historically, syndicated bank facilities, private credit and sponsor capital have generally been sufficient to satisfy funding requirements. As the sector expands, however, operators are increasingly seeking larger, longer-dated and more diversified sources of capital.

In many respects, Australia today resembles the position occupied by Europe immediately prior to the emergence of an active securitisation market. Asset values are increasing, portfolios are becoming larger and institutional ownership continues to deepen. These trends are creating a stronger economic rationale for securitisation as a funding tool.

At the same time, Australian market participants are increasingly recognising that CMBS and ABS structures should not necessarily be viewed as competing alternatives. Rather, each structure provides access to different investor bases and may be suitable for different asset profiles and financing objectives.

The critical question is therefore not whether securitisation can be used in Australia, but how international structures will need to be adapted to accommodate Australian legal, regulatory and operational conditions. That question is explored in the next articles in this series.

Global data centre securitisation markets at a glance

The table below summarises the key features of the United States, European, Asian and Australian data centre securitisation markets.

Feature	United States	Europe	Asia	Australia
Market maturity	Most developed and sophisticated globally; established asset class with an approximately 20-issuer base	Rapidly developing but at an earlier stage than the US; a small number of public transactions to date	Early stage generally; Japan a partial exception via structured real estate / J-REIT frameworks	No established public data centre securitisation market; any current activity would represent warehouse / bespoke stage transactions
Reference transactions	Large-scale transactions since 2018; annual issuance in excess of US$25 billion across both ABS and CMBS	Vantage Data Centres’ inaugural sterling ABS (UK, 2024); four public transactions to date (two UK, two continental Europe) totalling approximately €2.2 billion	Japanese transactions combine project finance and real estate securitisation supported by a mature J-REIT and structured real estate market; no established public data centre ABS/CMBS elsewhere in Asia	No established public reference transactions; syndicated bank facilities, private credit and sponsor capital have historically met the sector’s funding needs
Predominant structures	Both CMBS and ABS active; the majority of recent transactions are ABS issuances	Predominantly ABS supported by stabilised hyperscale-leased assets; emerging structural flexibility including hybrids of mortgage-backed and cash-flow features	Japan: project finance and structured real estate hybrids; other Asian markets: platform-based, bank-led financing, with specialised financing linked to GPU and computing assets beginning to emerge	International CMBS and ABS frameworks likely to be adapted to local conditions rather than replicated; each viewed as complementary rather than competing
Investor base and drivers	Deep institutional investor base; repeat and programmatic access; part of major operators’ broader capital management strategy	Investor base expanding; digitalisation, cloud adoption and AI-related infrastructure demand supporting further issuance; forecast €4-5.5 billion of issuance over the next year	Focus on sponsor equity, bank lending and increasingly private credit; institutional investor familiarity with digital infrastructure as an asset class still developing	Investment-grade counterparties, growing asset scale and deepening institutional ownership building the economic rationale for securitisation as a funding tool
Key structural constraints	Few structural constraints; a mature market with an established legal and regulatory framework	Fragmentation across legal systems, regulatory frameworks and currencies; grid capacity constraints; data sovereignty considerations	Legal, regulatory, tax and currency considerations vary widely across jurisdictions; differences in capital market depth may result in a fragmented development path	Adaptation of offshore precedents to local enforcement, contractual transferability, tax and duty regimes, foreign investment / regulatory approval requirements, electricity market and grid capacity, ESG and operational resilience considerations

Conclusion

The experience of the United States, Europe and Asia demonstrates that there is no single securitisation model for data centres.

The United States has developed the world’s most mature market, and Europe is rapidly establishing its own securitisation platform. Each jurisdiction reflects its own legal framework, capital markets environment and infrastructure ecosystem. The common theme is that securitisation tends to emerge once operators achieve sufficient scale, recurring revenues and institutional investor acceptance.

For Australia, the significance of these developments is not that they provide a template to be copied. Rather, they demonstrate the range of structures that may be available as the local market matures.

The next articles in this series examine each of these structures in detail, beginning with CMBS. Together they explain how the two models are constructed, how credit risk is allocated in each case, and what adaptation will be required before either can be deployed effectively in the Australian market.

Looking for deeper insights into the data centre space?

This article is part of a new thought leadership series focussing on key developments and legal considerations on financing the data centre sector in Australia. If you found this insightful, explore our other articles to deepen your understanding and stay ahead of legal trends.

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3. From construction to capital markets: private credit, securitisation and the future of data centre funding

From Bank Debt to Capital Markets – Australian Data Centre Financing in Practice

1. Australian data centre financing models: AirTrunk and NEXTDC’s path to platform-scale capital
2. Australian data centre financing models: CDC, Macquarie and the next stage of capital evolution
3. Australian data centre financing models: comparing AirTrunk, NEXTDC, CDC and Macquarie Technology Group
4. Australian data centre financing models: the underlying themes shaping access to capital
5. https://www.dentons.com/en/insights/articles/2026/august/26/data-centre-securitisation-explained-us-europe-asia