Data Centers to Propel Infra Securitizations Past $110 Billion by 2026 End

Bank of America projects the digital infrastructure securitization market, currently valued at $79 billion, will expand by approximately 46% to $115 billion by the end of 2026. This significant growth is primarily driven by data centers, which constitute 61% of the existing market, alongside fiber and cell tower assets. The forecast encompasses both asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS), highlighting a robust expansion in this specialized infrastructure-backed asset class.

Analysis

According to a Bank of America research note, the market for digital infrastructure securitizations is poised for substantial growth, with projections indicating a 46% expansion from its current $79 billion valuation to approximately $115 billion by the end of 2026. This growth is predominantly fueled by data centers, which currently account for a significant 61% of the market's collateral. The remaining collateral is composed of fiber infrastructure at 20% and cell towers at 18%. The forecast encompasses both asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS), signaling broad-based strength and increasing investor appetite for this specialized asset class, which is critical to the expanding digital economy.

Key Decisions for Investors

• Investors should consider increasing exposure to digital infrastructure securitizations, particularly those backed by data center assets, to capitalize on the projected 46% market growth.
• Evaluate both asset-backed and commercial mortgage-backed securities within this sector to align with specific risk-return profiles, noting the strong underlying demand for digital infrastructure.
• Monitor the performance and issuance trends of securitizations tied to fiber and cell tower assets, as they represent a meaningful 38% of the market and offer diversification within the digital infrastructure theme.