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Data Centre Stock In India Exceeds 9 Million Sqft, To Double By 2024, Says Report

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The data centre (DC) stock in India exceeded 9 million sqft during January-June 2022 with over 600-megawatt (MW) capacity in the country, according to a report by real estate consulting firm CBRE South Asia. It added that investments in data centres in India are expected to surpass $20 billion by 2025 and the growing digitalisation, coupled with a strong government policy impetus, has led to a surge in demand for DCs in India.

“In H1 2022, the DC stock in India exceeded 9 million sqft with an over 600 MW capacity in India. It is expected that the DC capacity will almost double by 2024, with more than 400 MW currently under construction across cities in India. Mumbai is expected to lead the supply addition, followed by Bengaluru, Chennai, and Delhi-NCR,” real estate consulting firm CBRE South Asia said in the report.

It added that the growing digitalisation, coupled with a strong government policy impetus, has led to a surge in demand for DCs in India. In addition, over-the-top, online gaming, increased smartphone usage, e-commerce, online schooling by edtech platforms, location-agnostic work, along with advanced technologies including machine learning, 5G, blockchain, and artificial intelligence, has led to a multi-fold jump in data transmission and need for high spec servers.

“Mumbai led in terms of pan-India DC stock, accounting for a share of about 48 per cent, followed by Bengaluru at about 18 per cent, along with Chennai (9 per cent), which is now gradually becoming one of the fastest growing DC markets in India. Together, these three cities accounted for nearly 75 per cent of India’s DC footprint. In addition, Delhi-NCR, Pune, Hyderabad, and Kolkata accounted for the remaining 25 per cent of the DC market in India,” the report said.

It added that hyperscale DCs majorly dominated investments during 2018-2021 with a share of about 77 per cent, a similar trend was recorded in H1 2022. Moreover, investments in hyperscale DCs were majorly spread across the top states, with West Bengal leading with a share of 22 per cent, followed by Uttar Pradesh (19 per cent), Telangana (16 per cent), and Tamil Nadu (8 per cent).

“On the other hand, more than half of investments announced in colocation DCs were across India, while the remaining half was split between the key states of Tamil Nadu, Maharashtra, West Bengal, Uttar Pradesh, and Telangana,” the report said.

CBRE also said the industry is focusing on white space strategies in order to future-proof itself. White space is the space allocated in DCs for IT equipment, including servers, storage, network gear, racks, cooling units, and power distribution systems. Currently, white space accounts for about 78 per cent of the total infrastructure investment worldwide.

“Along with scalability, speed to market and migration strategies, DC owners and operators should also pay close attention to three crucial implementation processes: risk management, consistency, and execution timing,” it said.

Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East & Africa) of CBRE, said, “With businesses across sectors expanding their digital infrastructure, DCs are becoming increasingly important as a larger alternate real estate class. Following policy refinement on the government’s part, the DC segment in India is expected to continue to grow. Tier-II and -III cities are also expected to see a rise in demand.”

Ram Chandnani, managing director (advisory and transactions services) of CBRE India, said, “DCs have emerged as one of the top-performing alternate asset classes in the global real estate market. With the progressive interest of global investors, operators and developers in this segment, the next decade is likely to witness the inclusion of quality DCs in future real estate portfolios. Technology and automation will also play a key role in terms of how DCs evolve over the next three to five years.”

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