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What’s Driving Apple’s Strong Appetite for Land?

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Jan. 2 2019, Updated 9:00 a.m. ET

Apple nearly triples its land holdings

At the end of September, Apple (AAPL) owned 7,376 acres of land, almost tripling its land holdings of 2,583 acres in the same period in 2016, according to a Financial Times article citing Apple’s latest annual filing. Apple’s land holdings stood at just 584 acres in 2011, suggesting that the company has gotten more interested in buying land rather than leasing it in recent years.

But Apple isn’t alone in showing a strong appetite for real estate property. Alphabet (GOOGL) spent $2.4 billion on the purchase of Manhattan’s Chelsea Market building in a transaction that closed early this year. Alphabet would later tell investors that the purchase of the Chelsea Market property was an example of its favoring owning rather than leasing when it sees a good opportunity.

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Land for data centers and solar farms

According to the Financial Times, Apple is making land purchases to build data centers as well as solar farms to power those centers with renewable energy. Apple has said it plans to spend $10 billion on building data centers across the United States in the next five years, adding that the facilities will run on 100% renewable power.

Google, Amazon (AMZN), and T-Mobile (TMUS) are other companies that are working to convert to 100% renewable energy to power their operations. T-Mobile, for instance, has set itself the goal of running its headquarters on 100% renewable energy by 2021.

Growing demand for data center resources

As Apple increases its emphasis on its services business, the demand for data center resources is also growing, raising the need for the company to invest in expanding its data center capacity. And it’s not alone: Google and Facebook (FB) are also busy expanding their data center capacities.

Facebook, for instance, is undergoing plans to build its first Asian data center in Singapore to meet the growing demand for computing and storage resources.

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