Technology giants claim that the future is online. Meanwhile, companies like Apple, Alphabet, Amazon, Microsoft and Meta are taking an increasingly large stake in the physical world. High growth has spurred a spending spree. The result is a boom in office space, warehouses, data centres and high street stores.
Amazon is betting on a return to offices by expanding from its Seattle headquarters to the suburb of Bellevue with a 3.5 acre site. But this does not cover the majority of the ecommerce company’s land use. In the last set of annual reports, Amazon listed its global properties as close to 35mn sq ft, plus another 570mn sq ft in leased space. It values its land and buildings at $81bn, up from $32bn at the end of 2018. The majority are warehouses and data centres that power its cloud computing business and reduce ecommerce delivery times.
That makes Amazon one of the most land-hungry Big Tech companies in the US. But it is not alone in scooping up global real estate. Microsoft’s expansion includes adding to its Redmond HQ. In total, the software group reported 67mn sq ft of land owned and leased for offices and data centres around the world for the 2021 fiscal year, up from 50mn sq ft in 2018. Meta, parent company of Facebook, has also added to its Menlo Park campus while expanding data centres around the world. It tots up its land and building value at $24bn in 2021, from $8bn at the end of 2018.
Apple has not reported the amount of land it owns since 2018. But the price tag for its land and buildings has grown from $16bn in 2018 to $20bn in the 2021 fiscal year. Much of this increase is also likely to be the result of data centres.
Google’s parent company Alphabet is tightening its grip on city centres, announcing a $1bn deal for London office space this year. While it does not provide a breakdown of square footage, it reports its land and building value at close to $59bn at the end of 2021, almost double the $30bn figure for 2018.
Profit generation in the pandemic suggests the expansion is not over. With large cash piles and double-digit net income, Big Tech can keep on using real estate to capitalise on its size.
Source: Financial Times