Service pages: development

Five things the Gen+1 Elevate conference made clear about the data centre market

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I attended the Gen+1 Elevate conference last week as part of the Forsters data centre team.

Demand for data centres is accelerating. That is no longer up for debate.

The more interesting question, and the clear theme from the panels, is whether projects can actually be delivered.

Across the panels, five themes stood out.

1. The real investment story is about execution, not yield

The numbers still work. Yields of 8-9%, and 5-7 year investment horizons continue to attract capital.

Investor focus, however, has clearly shifted.

The key question is no longer “should we invest?” but “can this scheme actually be built?”

That is driving a much sharper focus on:

  • planning risk;
  • power availability and timing; and
  • delivery capability and access to labour.

The rise of joint ventures reflects this. Investors are increasingly looking to partner with operators, energy providers and developers to access expertise they do not have in-house.

Collaboration though brings complexity. Alignment of interests, exclusivity and the risk of partners becoming future competitors are now live issues that need to be addressed early.

2. The definition of a “good site” is changing rapidly

Five years ago, a data centre site had a relatively clear profile. That is no longer the case.

Constraints around power, land and scale are forcing developers to rethink location and design. Sites that would previously have fallen outside the investable universe are now being revisited.

Flexibility is becoming the defining characteristic.

There was also a degree of realism in the room. Certain trends, particularly around modular solutions and aspects of the AI ecosystem, were openly described as over-hyped. The expectation is that the market will consolidate, with a limited number of long-term winners.

3. Power is no longer a constraint. It is the constraint

Every conversation ultimately came back to power.

The gap between demand and available capacity is now well understood. What is less well understood is the complexity behind it.

As we are seeing on our projects, “having power” is not a binary issue. It raises a series of more difficult questions:

  • when will it be available;
  • how reliable is it; and
  • what infrastructure is required to support it.

Operators are responding in different ways. Some are exploring on-site, behind the meter, generation and alternative energy solutions. Others are seeking greater control of their supply chain to reduce reliance on constrained infrastructure.

The conclusion is clear. Power availability, in both timing and structure, is now the single biggest factor in determining whether a project proceeds.

4. The delivery model is under strain

Even where land and power are secured, delivery is far from straightforward.

Supply chains are stretched, with long lead times for key components, including fibre. At the same time, there is a growing disconnect between leasing expectations and construction timelines.

The industry is also facing a significant skills gap. Quite simply, there are not enough people to build what is currently in the pipeline.

In response, operators are:

  • bringing parts of the supply chain in-house;
  • increasing use of prefabrication; and
  • using AI to improve productivity and safety.

These are mitigation strategies rather than solutions. Delivery risk remains a core issue.

5. Planning and perception are becoming commercial issues

Planning is no longer just a legal or regulatory hurdle. It is a commercial one.

There is increasing scrutiny of how data centres are perceived at the development stage, particularly in relation to energy use and pressure on infrastructure.

At the same time, the industry is not always effective at communicating the value data centres generate. The economic impact of large-scale schemes is significant, but often poorly understood outside the sector.

This is creating a need for better engagement, clearer messaging and a more coordinated approach to how the industry presents itself.

What this means for clients

The takeaway is clear. Demand is not the problem. Delivery is.

For investors, developers and operators, that shifts the focus to execution from the outset. In practical terms, that means:

  • Front-loading strategy so that planning risk, power timelines and deliverability are assessed early;
  • Structuring partnerships carefully, with clear alignment on roles, risk and long-term strategy;
  • Taking a holistic view of viability, recognising that land, planning, power and infrastructure need to be considered together;
  • Actively managing delivery risk, particularly in relation to supply chain, skills and program assumptions;
  • Retaining flexibility, both in site strategy and structuring, as requirements continue to evolve.

The projects that succeed will not necessarily be those with the best sites or the strongest demand. They will be the schemes where planning, power, capital and capability are aligned from day one.

That alignment is now where the real value sits.

If any of these themes resonate, get in touch with Forsters’ data centre team. We are already advising on these challenges across a range of projects and bring the depth of experience needed to deliver them successfully.

Demand is not the issue. Delivery is. Five practical takeaways from Gen+1 Elevate on what is really driving the data centre market.

Crest Nicholson v Ardmore: Breaking the Boundaries of Group Liability

Construction workers in high-visibility vests and helmets stand and communicate amidst metal scaffolding at a construction site, with sunlight streaming through an open structure.

The recent TCC decision in Crest Nicholson Regeneration Limited (Crest) v Ardmore Construction Limited (ACL) marked a significant development in the application of the Building Safety Act 2022 (BSA). For those not familiar with the background, we suggest reading our colleague Isabella Cleary-Moyland’s article here. In brief:

  • Crest engaged ACL to build a residential development in Portsmouth;
  • Fire safety defects were discovered in the external wall system following post-Grenfell investigations;
  • Crest successfully referred the dispute to adjudication and were awarded £14.9m;
  • ACL entered administration the day before the decision was made and did not pay the £14.9m;
  • Crest applied to the Court for, and were subsequently granted, Building Liability Orders (BLOs) against associated companies within the contractor’s group, making them jointly and severally liable for both the adjudication award and any liabilities later established against ACL.

The judgment significantly reshapes the risk profile for construction projects by confirming that liability for building safety defects can extend beyond the contracting entity to other companies within the same corporate group. This is likely to have a number of practical implications as parties shift towards more cautious, group-wide risk management and greater emphasis on financial robustness and accountability across the supply chain, rather than reliance on corporate separation alone.

Group Structures & Risk

BLOs can be made against entities associated with the original contracting entity. Given the broad circumstances under which an entity can be considered an associate of the original contracting entity, contractors and developers will rethink the use of special purpose vehicles (SPVs) or group restructuring to ringfence liabilities for construction projects.

Contractual Rights for Group Companies

The decision emphasises the need for developers to include provisions in building contracts to ensure that their wider group has rights of action against contractors, to provide some potential recourse in the event an entity in the wider group becomes liable under a BLO. Contractors may seek to do the same in their sub-contracts.

Stronger Emphasis on Group Financial Standing 

Potential claimants (developers in particular) may increase their focus on the financial standing of their counterparty’s wider group of entities, as the certainty regarding what entities they may be able to claim against in the event of a building safety defect increases. 

Proactive Dispute Management and Compliance With Adjudication Decisions

With the ruling that decisions reached via adjudication can be a “relevant liability” under the BSA to which a BLO may apply, parties may take a more proactive approach to resolving issues early to avoid exposure to their group. Further, there is likely to be more willingness for parties found liable for building safety defects in adjudication decisions to comply with the adjudicator’s decision, given that winding up the original contracting entity may not be of any benefit to the wider group, making delay and resist strategies against robust claims less attractive.

Timing is everything for possession on the basis of redevelopment

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Salisbury, Wiltshire, UK - Aug 29 2025: The Market Place in central Salisbury showing Ox Row. People sit outside local pubs enjoying a drink in the evening sunshine.

Pridewell Properties (London) Limited v Spirit Pub Company (Managed) Limited

The High Court handed down a decision which clarifies what a landlord must prove in order to satisfy its intention to redevelop under ground (f) of s.30(1) of the Landlord and Tenant Act (“1954 Act”), especially in relation to the timing of the redevelopment. 

Background

In 2025 Spirit Pub Company (Managed) Limited successfully prevented its landlord (Pridewell Properties (London) Limited) from using ground (f) of the 1954 Act (“ground (f)“) to terminate its lease on the basis of redevelopment works.

The High Court (on appeal) has upheld part of the County Court’s decision and maintained that the landlord is prevented from obtaining possession.  However, of most interest is how the High Court’s judgment dealt with the timing of the works and whether the landlord was in a position to commence works “on the determination of the current tenancy” in order to satisfy the ground (f) test.  

Original decision

The County Court judge was satisfied that the proposed works were substantial enough to use ground (f). However, the landlord failed to evidence that it had a real prospect of obtaining the necessary funding for the development. The landlord’s proposed lender had indicated it would require directors/shareholders to provide guarantees. No evidence was provided to the court of the personal finances of those parties to enable the court to conclude that satisfactory guarantees would be provided. 

There were a number of other hurdles the landlord needed to overcome in order to carry out a redevelopment, but the court concluded the landlord had a real prospect of dealing with them.

Unusually, the landlord had not applied for planning permission by the point of trial. The landlord needed to obtain access to the property to carry out certain surveys before submitting a planning application but did not have sufficient rights in the lease to obtain access. The court originally found that the landlord had a real prospect of overcoming the other issues it was facing and, other than the issue of funding, would be in a position to carry out the works “on the determination of the current tenancy” (which is the statutory test set out in ground (f)). That is despite not being in a position to commence works until 10–14 months after obtaining possession because it would take that long to obtain planning permission. The judge concluded that was within a reasonable time of the lease terminating, given circumstances where the landlord could not obtain access for surveys any earlier.

Appeal

Both parties appealed the judge’s decision.

Funding 

The landlord’s appeal failed. The High Court concluded that the lender had indicated it would require security, and given that no evidence was provided that a satisfactory guarantee would be provided, the landlord could not show a real prospect of obtaining the necessary funding for the development. The landlord could not therefore show it had the necessary intention required under the 1954 Act to obtain possession on ground (f).

While the landlord’s appeal failed, the appeal judge went on to consider the tenant’s grounds of appeal (essentially challenging the original judge’s findings that the landlord had a real prospect of overcoming the other outstanding issues and that it would commence the works on determination of the lease).

Timing of the development

Of most interest is the judge’s decision regarding the timing of the redevelopment. The judge overturned the County Court’s decision and clarified that the relevant question is whether, given a delay in starting the works, a landlord could be said to intend to carry out the works on the termination of the lease, i.e. by a reasonable time after termination of the lease, not at any long-delayed time. What is a reasonable time/not any long-delayed time is not assessed on whether the delay is reasonable in the circumstances (here, the issue of obtaining access for surveys before applying for planning permission). The court will need to assess on a case-by-case basis what period of time could be added onto the date on which the landlord obtains possession without the works ceasing to be classified as being carried out on the termination date. That will vary depending on the nature of the development, for instance large sites are likely to take longer to mobilise contractors and carry out other preliminary steps.

Key outcomes 

  • Those acquiring or assembling development sites need to ensure sufficient access rights. The landlord in this case was hampered as it was unable to access the property. This meant it could not obtain surveys or make a planning application and, therefore, could not show it would commence works on the determination of the lease. If a landlord is facing this issue, it may need to consider following an unopposed lease renewal process with a view to obtaining a redevelopment break in the new lease, with sufficient access rights for the landlord in order to pave the way for future redevelopment.
  • A lease terminates 3 months and 21 days after the conclusion of a court process. If a landlord needs a relatively short period after that before commencing works, it will still meet the ground (f) test. What is a short period will depend on the specific development, but  is likely to include the time needed to secure and clear the property and mobilise contractors and take preliminary steps. Those carrying out large developments in urban areas are likely to be afforded longer than small developments at easily accessed sites.
  • For multi-let development sites it is important to plan ahead and ensure that the landlord can obtain possession of the other areas of the development site, at very similar times.
  • A landlord needs to take great care to flesh out the evidence behind its intention to redevelop, and ensure that it clearly shows how any unresolved issues will be dealt with.

BNG update: exemptions and further consultation

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Following the 2025 public consultation into improving the implementation of biodiversity net gain (BNG) for minor, medium and brownfield development, the Government has announced the following:

  • Removal of the self and custom build exemption. The Government expects that small scale single dwellings will be covered by the new area based exemption.
  • The Government announced in December 2025 a new 0.2 hectare area-based exemption for all applications, regardless of the development type. The existing de minimis exemption will continue to apply at this stage.
  • Temporary planning permissions granted for a maximum of 5 years will be exempt from the BNG regime.
  • Amendments to the biodiversity gain hierarchy for minor development, placing off-site biodiversity gains on the same preference as enhancement and creation of onsite habitat. 

All of the above are now expected to take effect before 31 July 2026 (subject to parliamentary scheduling) with draft legislation being tabled by DEFRA. 

A new consultation has also now been launched on an exemption for residential development on brownfield land, closing in June 2026. The Government expects to bring forward any amendments arising from that consultation later in 2026. 

The Government has reiterated its commitment to the BNG regime and these new announcements appear to show an attempt to strike a balance between this position and its commitment to support development, particularly in respect of house-building targets. From a local authority perspective, these amendments are likely to mean determination of smaller applications can progress faster without consideration of the requirements of the BNG regime. 

The government remains committed to BNG and recognises the importance of BNG in delivering nature-positive homes and infrastructure that this country needs.

https://www.gov.uk/government/consultations/improving-the-implementation-of-biodiversity-net-gain-for-minor-medium-and-brownfield-development/outcome/government-response-and-summary-of-responses#government-response-part-1-improving-exemptions

The Future Buildings Standard is here: what do commercial real estate investors/developers need to know?

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Many of us will have read headlines in the press this week about the launch of the updated Future Homes Standard, which mandates zero carbon technology (e.g. solar panels, heat pumps) on most new domestic homes.

This is an important step and has been well received but this week has also seen, after a long wait and with somewhat less fanfare, the announcement of the Future Buildings Standard (FBS) for non-domestic buildings.

What is it and how did we get here? 

As mentioned in the Solar Roadmap the Government has identified the key contribution that rooftop solar on non-domestic buildings can make in the road to net-zero. The Roadmap also envisages that the Building Regs regime will be the most reliable route for scaling up rooftop solar (as with domestic buildings and the ‘Future Homes Standard’).

In short, the FBS introduces mandatory solar PV (amongst other energy performance requirements) for new buildings via Part L of the Building Regulations in England.

What does this mean for commercial real estate?

New non-domestic buildings in England will be required to produce significantly lower carbon emissions than under existing regulations, specifically:

Non-domestic buildings (e.g. offices, warehouses, retail buildings) must incorporate solar panels equivalent to 40% of the building’s foundational area.

Other points to note:

  • Transitional arrangements apply to existing projects where an initial notice or application for building control approval has been submitted before 24 March 2027 (as long as that work starts before 24 March 2028).
     
  • The updated Regulations will apply to ‘higher-risk buildings’ (using the Building Safety Act definition) from 24 September 2027 (rather than the 24 March 2027) and different transitional provisions apply depending on whether a valid Gateway 2 application has been made before this date. Additionally, HRBs are exempt from the solar PV requirement.
     
  • Buildings containing accommodation which is not ‘self-contained’ (e.g. hotel rooms and student accommodation which do not have their own entrance, kitchen, bedroom, living space) will be assessed in line with the regulations for non-domestic buildings rather than domestic.
     
  • These requirements do not apply to:
    • Listed buildings or buildings in a conservation area if compliance would unacceptable alter the building’s character or appearance.
    • Buildings used primarily or solely as places of worship,
    • Temporary or modular/portable buildings (planned to be used for two years or less).
    • Industrial/workshop/agricultural buildings with no or limited energy demand for heating or cooling systems.
    • New and existing non-domestic buildings with less than 50 square meters of useful floorspace.
    • Carports and covered yards below certain sizes. 

Key dates:

  • 24 March 2027 – commencement of the FBS for most non-domestic buildings excluding higher risk buildings (HRBs).
  • 24 September 2027 – commencement of the FBS for HRBs.
  • 24 March 2028 – end of transitional arrangements for non-HRBs.

Final thoughts:

We welcome the Government publishing their response on the Future Buildings Standard and the continued recognition that rooftop solar on non-domestic buildings has a big part to play in reducing our reliance on gas and oil – particularly in light of recent events in the Middle East.

Nevertheless, a variety of challenges remain for landlords and developers looking to implement rooftop solar projects into their portfolios, including Grid connections, tenant engagement, concerns around rooftop structures but also viability/financing concerns. The withdrawal of VAT rebates on Chinese exported PV panels from 1 April 2026 is going to add significant costs to the cost of new PV panels.

The Future Buildings Standard is, therefore, a good start but is just one piece of a rather complicated puzzle. Click here to visit our commercial real estate page.

When data centres become targets: a legal wake‑up call on resilience, data sovereignty and energy security

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Recent attacks on data centres during the ongoing conflict involving Iran underline a stark reality. Data centres are no longer just commercial assets. They are strategic infrastructure.

Their targeting reflects how deeply digital infrastructure is embedded in modern economies. Banking systems, healthcare, logistics, government services and AI platforms all rely on uninterrupted access to data. When data centres fail, the consequences are immediate, wide‑ranging and often legally complex.

For businesses, developers and investors, this marks a shift. Operational resilience, data sovereignty and energy security are now legal and strategic considerations, not simply technical ones.

Resilience is becoming a legal obligation

Historically, resilience was addressed through service levels and technical design. That position is changing rapidly.

In the UK, data centres have been designated Critical National Infrastructure, and forthcoming reforms to the cyber and resilience regime will bring large data centres directly within the scope of regulatory oversight. Operators will be expected to demonstrate appropriate and proportionate measures to manage physical, cyber and operational risk, alongside mandatory incident reporting.

From a legal perspective, this raises key questions:

  • How resilience obligations are allocated between landowners, developers, operators and occupiers.
  • Whether existing leases, options, development agreements and collateral warranties adequately address business continuity, outages and force majeure.
  • The extent to which resilience commitments should be reflected in planning conditions, infrastructure agreements and funding documentation.

Standards such as ISO 22301 (Business Continuity) and ISO/IEC 27001 (Information Security) are increasingly relevant as reference points when assessing whether resilience measures are reasonable or market standard. This is particularly so in disputes, regulatory scrutiny or transactional due diligence.

Data sovereignty moves from policy to property

The conflict also sharpens the focus on where data is stored and under whose control.

Data sovereignty is no longer driven solely by data protection law. Geopolitical risk, sanctions exposure and national security considerations are influencing decisions about site selection, ownership structures and operational control of data centres.

For the UK and EU, this is accelerating demand for:

  • In‑country and sovereign data centre capacity.
  • Greater scrutiny of foreign ownership and control.
  • Contractual restrictions on data location, access rights and cross‑border failover arrangements.

From a property and development perspective, this has implications for planning strategy, investment structuring, joint ventures and long‑term asset value, particularly where sites are intended to support public‑sector, regulated or sensitive workloads.

Energy security becomes part of resilience

Recent events in the Middle East underline a further and often under‑appreciated risk. Data centre resilience is inseparable from energy security.

The current conflict involving Iran has driven a sharp increase in global oil prices, compounded by Qatar’s unprecedented decision to halt oil production. That development alone has exposed the fragility of global energy supply chains and the speed at which geopolitical events can translate into economic and operational instability. For infrastructure reliant on continuous, high‑volume power, the implications are immediate.

In this context, energy strategy is no longer just a question of cost or sustainability. Secure, controllable access to power is now a core resilience issue.

While the sustainability case for renewables is well established, the energy security case cannot be undervalued. On‑site and locally generated power, including wind, solar and tidal energy, can reduce dependence on volatile international markets and exposed fuel supply routes when paired with appropriate storage and grid balancing. Small Modular Reactors (SMRs) are also increasingly being examined as a potential long‑term solution for delivering stable, low‑carbon baseload power to energy‑intensive infrastructure such as data centres.

For developers, investors and occupiers, this reframes energy procurement as a legal and strategic risk issue. It raises questions around long‑term power availability, exposure to fuel and pricing shocks, planning and consenting strategy, and how energy risk is allocated contractually across ownership and operational structures.

In short, resilience is no longer just about surviving outages. It is about insulating critical infrastructure from geopolitical energy shocks. Sustainability remains vital, but the current conflict demonstrates that energy security now sits alongside decarbonisation as a primary driver of data centre strategy.

Resilience, sustainability and regulation are converging

Resilience cannot be separated from sustainability. For example, the EU’s Energy Efficiency Directive now imposes reporting and performance obligations on larger data centres, including energy usage, cooling efficiency and waste heat reuse.

While driven by climate policy, these requirements also support resilience by reducing strain on power, cooling and grid infrastructure. All of these are critical during periods of disruption. For developers, energy strategy is increasingly inseparable from resilience strategy.

What this means in practice

For those involved in developing, owning or operating data centres, the lesson is clear. Resilience, data sovereignty and energy security must be embedded at a legal and structural level, not retrofitted later.

That means:

  • Addressing resilience and power security at the site selection and planning stage.
  • Clearly allocating operational and energy‑related risk in contracts and funding documentation.
  • Treating regulatory compliance as a value‑preserving exercise, not a tick‑box.

The events in Iran may be extreme, but the signal is unmistakable. Data centres are now nationally significant assets. Their regulation, design and energy strategy are evolving accordingly.

Those who anticipate this shift will be better placed to manage risk, protect asset value and maintain trust in an increasingly uncertain world.

Cloud infrastructure was always theoretically vulnerable to kinetic warfare, but nobody had priced that risk in so far. Now that has to change

https://www.aa.com.tr/en/middle-east/iran-war-shows-data-centers-emerging-as-critical-targets/3852984