• Forms capital partnership for operating and under construction data centers in NorthAm, expects 1Q26 close of first tranche
• Proceeds to support powered land bank
• Signs 800 MW of backlog, mostly across North America and Europe

Udhay Mathailagan, head of Brookfield Infrastructure Partners global data center business, discussed the publicly-traded asset manager’s plans in the digital arena on its 4Q25 earnings held on January 29.

“The sector remains exposed to overbuilding, technological change and disruption,” he said. “With capital moving quickly, not all participants will be rewarded and there will be mistakes made. Our approach is designed to protect against such exuberance.”

Funds from operations (FFO) from company’s data segment was USD 502m, a 50% increase year over year, attributable to investment in its US bulk fiber network, strong organic growth across its data storage business, which included commissioning 220 MW of capacity at hyperscale data centers, 200 MW of new billings at US retail colocation data center operations and income generated by global data center developers.

BIP also backs co-location data center builder Centersquare.

BIP’s global data center platform has development potential consisting of 3.6 GW, including contracted capacity of over 2.3 GW.

As for the backlog, BIP said it signed about 800 MW globally, including a mixture of North America, Europe and APAC. This includes USD 3.9bn related to Intel which is expected to commission from our earnings profile in 2H26.

The scope has allowed BIP to form a capital partnership for a portfolio of stabilized and under construction data centers in North America. Proceeds from the sale are expected to be used to support the build-out of a powered land bank within the business, added BIP’s CFO David Krant on the call.

An initial tranche of assets is expected to close in 1Q26.

NPM reported in May 2025 that Compass Data Centers, a joint venture between BIP and Ontario Teachers Plan, had engaged Deutsche Bank to sell a portfolio of operational data centers, but BIP did not specify this deal on the earnings call.

Mathailagan said BIP relies on development projects underpinned by long-term contracts with favorable terms, focus on strong investment-grade counterparties, focus on “top-tier workload-agnostic locations for our data centers that can support the full spectrum of demand reducing the risk of the single theme exposure” and finally its disciplined strategy as it relates to how much land and powered shells its chooses to develop.

Lastly, BIP matches the capital structure to the tenor of contracted cash flows with a focus on preserving flexibility and ensuring it can finance growth responsibly.

Results

Mathailagan said it signed several large contacts at a data center in Illinois during 4Q25, achieving 100% occupancy and adding approximately USD 45m of EBITDA on a run rate basis.

BIP also acquired, absent any equity investment, a 40-site data center portfolio in January 2024 and increased EBITDA to USD 500m from USD 200m.

“The exciting part is that the growth journey is expected to continue, led by high returning under-roof densification and in-footprint expansion location” which totals over 600 MW of identified growth potential.

Overall, BIP added 800 MW of capacity, mostly in North America and the vast majority of leases are with investment grade customers, underpinned by long-term contracts.

In response to a question, BIP’s CEO Sam Pollack said it generally looks to lock in equity returns in the high teens to 20%, when factoring in yield to cost on average between 9% and 10%, monetize them at cap rates between 5.5% and 6% on average, and leverage in the 70% range.

Mathailagan also stressed BIP’s adherence to 15-year contracts as a way of managing technology risk.

“By making sure we’ve got long-term contracts we are staying completely out of any technology change that could take place in that period,” he said.

NPM data is tracking eight planned data centers under development by Compass.

BIP Performance

BIP also completed the first project with Bloom Energy installing 55 MW of behind-the-meter power for a data center site in the US and since secured additional projects with hyperscalers bringing the total to 230 MW.

The added business has contracted terms of 15 years in length, BIP’s total equity investment is expected to be USD 50m and fully deployed by mid-2027.

Pollack also said that BIP could be a pool of capital for Brookfield’s USD 10bn AI infrastructure fund.

“Keeping in mind portfolio construction objectives for BIP, if it is in the data center sector, if it’s gas-related, if it’s utility-related, those are all sectors. If the returns fit, then we would invest through BIP” for those type of transactions,” added Pollack.

*This story was originally published exclusively for NPM subscribers.