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Assad Noori, executive director and EMEA head of data centres at JLL, told RCRTech that he expects the standardized ratings to increasingly become a way for market participants to assess individual assets, although it would not replace the factors currently driving site selection
In sum – what to know
Ratings become a KPI – JLL expects the standardized EU rating to increasingly serve as a screening tool for investors, lenders, and hyperscale occupiers.
Performance gains matter – Strong energy, water, and grid-flexibility performance could improve positioning around planning, power allocation, occupier demand, and green finance.
Legacy assets face pressure – Greater transparency could leave inefficient and aging data centers facing greater obsolescence and refinancing risk.
The European Union’s proposed data center rating scheme could become an increasingly important consideration for investors, lenders and hyperscale occupiers, according to Assad Noori, executive director and EMEA head of data centres at JLL.
The European Commission proposed the common rating scheme last month to increase transparency around data centers’ energy and water use and their contribution to the electricity system. Under the proposal, individual data centers above 500 kW would be covered, with the first sustainability labels expected in 2027.
Noori told RCRTech that the scheme could have implications beyond sustainability reporting. He expects the standardized rating to increasingly become a way for market participants to assess individual assets, although it would not replace the factors currently driving site selection.
“I expect it to be significant, but it won’t drive decisions on its own,” Noori said. “Power availability and connectivity will remain the primary site selection factors,” he said.
However, he expects the rating to become an additional measure for investors and other data center stakeholders. “A standardised rating will increasingly act as a screening tool for investors, lenders, and hyperscale occupiers,” Noori said. “It will influence where capital is allocated and how assets are valued basically. It’s not an exact science, but another KPI to help inform decisions.”
Noori also expects greater transparency around energy, water, and grid performance to create differences between individual data centers. “Operators that can evidence efficient energy (PUE) and water use (WUE) and flexible grid interaction will be better placed on planning, power allocation, occupier demand, and access to green finance,” he said.
The comments point to a potential distinction between data centers that can demonstrate strong performance and those with less efficient designs. Noori said improved reporting and greater comparability could benefit stronger operators while increasing pressure on older assets.
“As we improve reporting and as it becomes comparable and more public, strong operators will do well while data centers that are facing greater obsolescence (legacy assets, designs etc) and face refinancing risk will probably do worse as it will cost huge amounts of investment to remedy,” he said.
The potential impact therefore extends to existing data center assets as well as new developments. Noori specifically identified legacy assets and designs facing greater obsolescence and refinancing risk, while noting that addressing those issues could require significant investment.
The rating scheme would therefore add another performance measure to an industry where power availability and connectivity remain primary site-selection factors. For investors, lenders and hyperscale occupiers, Noori expects the standardized information to provide another KPI for assessing data centers and informing decisions around capital and asset value.
The European Commission is also pursuing minimum performance standards for data centers alongside the rating scheme. The rating proposal remains subject to scrutiny by the European Parliament and the Council, with the first sustainability labels for individual data centers expected in 2027.
