Powered shell
A data centre building with power and connectivity delivered but without internal fit-out, which the tenant installs. The landlord's risk is close to real estate.
How it works
A powered shell is a completed data centre building with utility power and connectivity brought to it, but without the internal electrical and mechanical fit-out. The tenant, usually a hyperscaler, designs and installs its own power distribution, cooling and IT equipment. Rent is lower per megawatt than a fully fitted facility, but leases are long and the landlord's capital outlay is smaller.
In GPU and data centre deals
Powered shell leases to investment-grade tenants are among the most bankable data centre assets. They are financed much like long-lease real estate: construction loans that convert to term debt, then refinanced through CMBS, ABS or private placements once the tenant is paying rent. Because the tenant owns the fit-out, the landlord's security covers the land, building and lease rather than the equipment inside.
What gets negotiated
- Rent commencement and what counts as delivery of the shell
- Delay liquidated damages and the tenant's right to terminate for late delivery
- Who funds and owns the fit-out, and what happens to it at lease expiry
- Utility power delivery risk and the timetable for energisation
How it works in a deal
A powered shell is a building with secured power and core infrastructure but without the tenant's fit-out. Lenders treat it as closer to real estate than to an operating data centre, so advance rates depend on the lease and the timing of energisation.
Example. Developers often finance powered land and shells before the tenant's equipment arrives, then refinance once the lease starts and the asset is stabilised. Powered land finance guide →
For in-house counsel
Take it to the documents
The filed wording behind GPU and data centre financings, for either side of the table. Previews are open; the full text is free with InfraCompute Weekly.
- Financing clause libraryCash traps, coverage ratios, cures and step-in, from the filed deals.
- Contract libraryGPU contracts, leases, power, equity and JVs, quoted from filed contracts.
- Issues list builderBuild an issues list from the lender’s or the borrower’s side.
- The legal desk for in-house counselContract library, issues lists, checklists and English law notes.
Related terms
Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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