DC ROI Calculator

Total CAPEX ($M) ?

Capital Expenditure

Total upfront capital investment including land, building, MEP systems, IT infrastructure, and soft costs. Typical data center construction costs range from $8-15M per MW for conventional and $15-25M per MW for AI-optimized facilities.

IT Capacity (MW) ?

IT Power Capacity

Total IT power capacity available for lease or use. This determines your revenue potential. A 10MW facility at $150/kW/month generates up to $18M annually at full occupancy. AI-optimized facilities can command $200-350/kW/month.

Project Lifetime (years) ?

Investment Horizon

Total project analysis period in years. Data center buildings typically have a 20-25 year economic life. Shorter horizons (10-15 years) are common for colocation and leased facilities. IT equipment refreshes every 4-5 years within this period.

10 years 15 years 20 years 25 years Construction Period (months) ?

Build Duration

Time from ground-breaking to first revenue. During construction, CAPEX is deployed but no revenue is generated. Modular builds can achieve 12-18 months; traditional purpose-built facilities typically require 18-30 months.

12 months (Modular) 18 months (Standard) 24 months (Complex) 30 months (Mega)

Revenue Model ?

Business Model

Colocation charges per kW/month for power and space. Wholesale offers lower rates ($100-140/kW) for large deployments. Retail commands premium pricing ($150-250/kW) for smaller, managed deployments. Hyperscale/AI can reach $200-400/kW for liquid-cooled, high-density capacity.

Wholesale Colo ($100-140/kW/mo) Retail Colo ($150-250/kW/mo) Hyperscale/AI ($200-400/kW/mo) Avg Revenue per kW/month ($) ?

Monthly Revenue Rate

Average monthly revenue per kilowatt of IT capacity sold. This is the primary revenue driver. Blended rates account for different contract sizes and service levels. Industry average is $130-180/kW/month for retail colocation in developed markets.

Annual Price Escalation: 3% ?

Annual Price Growth

Annual percentage increase in revenue per kW. Most colocation contracts include 2-5% annual escalators. Power-pass-through models may have higher effective escalation if electricity prices rise. Negative values model price compression from competition.

Ancillary Revenue (% of base) ?

Additional Services Revenue

Revenue from cross-connects, remote hands, managed services, network services, and other value-added offerings as a percentage of base colocation revenue. Mature operators typically generate 15-25% ancillary revenue on top of base power/space charges.

5% — Minimal services 10% — Basic cross-connects 15% — Standard portfolio 25% — Full managed services

Electricity Rate ($/kWh) ?

Electricity Unit Cost

Industrial electricity rate including demand charges, transmission, and distribution. Ranges from $0.03/kWh in low-cost markets (Qatar, Saudi Arabia) to $0.25/kWh in premium markets (Germany, Japan). This is typically the largest OPEX component at 40-60% of total operating costs.

PUE ?

Power Usage Effectiveness

Ratio of total facility power to IT load. Directly impacts electricity OPEX — a PUE of 1.5 means 50% overhead power for cooling, lighting, and losses. Improving PUE from 1.5 to 1.3 on a 10MW facility saves ~$1.4M/year at $0.08/kWh.

Annual Staffing ($M) ?

Personnel Costs

Total annual cost for facility operations staff including engineers, technicians, security, and management. Typical staffing ratios are 1 FTE per 2-5 MW for colocation. A 10MW facility typically requires 15-25 staff at $2-4M total annual cost depending on market.

Annual Maintenance ($M) ?

Maintenance & Repairs

Annual cost for preventive and corrective maintenance of MEP systems, generators, UPS, cooling, fire suppression, and building fabric. Typically 1.5-3% of MEP CAPEX per year. Includes OEM service contracts, spare parts, and third-party maintenance.

Insurance & Other ($M/yr) ?

Insurance & Overhead

Annual property insurance, liability insurance, property taxes, SGA expenses, and other overhead costs. Typically 0.5-1.5% of total asset value per year. Includes business interruption insurance, which is critical for data center operations.

Annual OPEX Escalation: 2.5% ?

Cost Inflation Rate

Annual increase in operating costs driven by labor inflation, electricity price changes, and general cost escalation. Electricity costs may escalate faster (3-5%) while maintenance costs typically grow at 2-3%. This applies to all non-electricity OPEX components.

Ramp Profile ?

Leasing Velocity

How quickly the facility fills with paying customers after construction. Conservative assumes 5-7 years to full occupancy. Moderate targets 3-5 years. Aggressive assumes 2-3 years (pre-leased anchor tenants). Custom allows manual year-by-year entry.

Year 1 Occupancy: 25% ?

First Year Fill Rate

Percentage of IT capacity occupied in the first year of operation (after construction). Pre-leased facilities may start at 40-60%. Speculative builds often start at 10-20%. This directly impacts first-year revenue and cash flow.

Year 3 Occupancy: 60% Year 5 Occupancy: 85% Steady-State Occupancy: 92% ?

Maximum Occupancy

Peak occupancy rate the facility achieves and maintains long-term. Most operators target 85-95% rather than 100% to maintain flexibility for customer growth and churn replacement. A buffer of 5-10% accounts for stranded capacity and power density mismatches.

Debt/Equity Split ?

Capital Structure

Proportion of CAPEX funded by debt vs equity. Higher leverage (70-80% debt) amplifies equity returns but increases financial risk. Data center projects typically attract 60-75% LTV (loan-to-value) from lenders due to strong, contracted cashflows.

100% Equity (No Debt) 50/50 Debt/Equity 60/40 Debt/Equity 70/30 Debt/Equity 80/20 Debt/Equity Interest Rate (%) ?

Cost of Debt

Annual interest rate on project debt. Data center project finance typically achieves SOFR + 200-350 bps for investment-grade borrowers. Current rates range from 5-8% depending on credit quality, leverage, and market conditions.

Loan Term (years) ?

Debt Maturity

Duration of the loan repayment period. Longer terms reduce annual debt service but increase total interest paid. Data center project loans typically have 7-15 year terms with 20-25 year amortization schedules.

7 years 10 years 15 years 20 years Discount Rate / WACC (%) ?

Weighted Average Cost of Capital

The rate used to discount future cashflows to present value for NPV calculation. Represents the blended cost of debt and equity capital. Typical data center WACC ranges from 7-12%. Higher discount rates produce lower NPV, reflecting higher required returns or risk.

Corporate Tax Rate: 25% ?

Effective Tax Rate

Effective corporate income tax rate applied to operating profit. Varies by jurisdiction: US (21% federal + state), Singapore (17%), Ireland (12.5%), UAE (9%). Many data center markets offer tax incentives, holidays, or accelerated depreciation that reduce the effective rate.

Depreciation Method ?

Asset Depreciation

Method for depreciating capital assets for tax purposes. Straight-line spreads the deduction evenly. Accelerated (MACRS) front-loads deductions, improving early cash flows. Bonus depreciation allows 100% deduction in year one (available in some jurisdictions).

Straight-line (20 years) Accelerated (MACRS 15yr) Bonus depreciation (100% Y1) Terminal Value Method ?

Exit Valuation

How the residual value of the asset is calculated at the end of the analysis period. Cap rate method values the asset as a multiple of final-year NOI. Book value uses remaining depreciated value. None assumes zero terminal value (conservative). Data centers typically trade at 5-8% cap rates.

None (Conservative) Cap Rate (NOI / Cap Rate) Book Value Exit Cap Rate: 6% ?

Capitalization Rate

The capitalization rate used to value the property at exit. Lower cap rates imply higher valuations. Data center cap rates have compressed from 7-9% historically to 5-7% currently due to strong institutional demand. AI-ready facilities may trade at even tighter caps.