India's stock of data centres exceeds 9 million square feet and is expected to double by 2024

Posted on: September 30, 2022
How technology is transforming Indian real estateIndia's stock of data centres exceeds 9 million square feet and is expected to double by 2024

According to a report by a real estate consultancy firm, the data centre (DC) stock in India topped 9 million sqft between January and June 2022, with over 600 megawatts (MW) capacity in the country. It went on to say that investments in data centres in India are likely to exceed $20 billion by 2025 and that rapid digitisation, along with a strong government policy drive, has resulted in a spike in demand for DCs in India.

"By H1 2022, India's DC stock had surpassed 9 million square feet, with a capacity of over 600 MW." It is predicted that DC capacity will nearly quadruple by 2024, with more than 400 MW already under development in Indian cities. The supply addition is likely to be led by Mumbai, followed by Bengaluru, Chennai, and Delhi-NCR, "According to the research, a real estate consultancy business.

It said that rising digitisation, combined with a strong government policy push, has resulted in a boom in demand for DCs in India. Furthermore, over-the-top, online gaming, increased smartphone usage, e-commerce, online schooling via edtech platforms, location-agnostic work, and advanced technologies such as machine learning, 5G, blockchain, and artificial intelligence have resulted in a multi-fold increase in data transmission and the need for high-spec servers.

"Mumbai dominated in terms of pan-India DC stock, accounting for around 48%, followed by Bengaluru at approximately 18%, and Chennai (9%), which is now progressively becoming one of India's fastest expanding DC marketplaces." These three cities together accounted for roughly 75% of India's DC footprint. Furthermore, Delhi-NCR, Pune, Hyderabad, and Kolkata accounted for the remaining 25% of India's DC market, "According to the survey.

It went on to say that hyper-scale DCs dominated investments from 2018 to 2021, accounting for around 77% of all investments; a similar pattern was observed in H1 2022. Furthermore, investments in hyperscale DCs were heavily concentrated in the top states, with West Bengal leading the way with a 22% share, followed by Uttar Pradesh (19%), Telangana (16%), and Tamil Nadu (14%). (8 per cent).

"However, more than half of the investments announced in colocation DCs were spread across India, with the other half split among the important states of Tamil Nadu, Maharashtra, West Bengal, Uttar Pradesh, and Telangana." "According to the report.

According to the report, the sector is also concentrating on white space tactics to future-proof itself. White space is the data centre area designated for IT equipment such as servers, storage, network gear, racks, cooling units, and power distribution systems. White space currently accounts for around 78% of overall infrastructure expenditure worldwide.

"In addition to scalability, speed to market, and migration methods, DC owners and operators should focus on three critical implementation processes: risk management, consistency, and execution timing." "It stated.

"With businesses across industries building their digital infrastructure, DCs are becoming increasingly significant as a larger alternative real estate class," stated the chairman and CEO. The DC market in India is likely to develop more as the government's policies are refined. Demand is also predicted to surge in Tier II and III cities."

"DCs have emerged as one of the top-performing alternate asset classes in the global real estate market," stated a managing director (advisory and transaction services). With global investors, operators, and developers increasingly interested in this market, the next decade is expected to include excellent DCs in future real estate portfolios. Technology and automation will also play a significant role in the evolution of DCs during the next three to five years."