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MC Exclusive: DLF to begin work on second data centre in Noida; to invest around Rs 135 crore

Data centres are becoming a separate asset class that real estate companies want to add to their portfolios

DLF, India’s biggest listed real estate company, is set to construct a second data centre in Noida that has been pre-leased to Singapore-based ST Telemedia Global Data Centres.

The developer will invest about Rs 135 crore to build the centre, which will be spread over 364,000 square feet, Sriram Khattar, DLF’s managing director (rental business), told Moneycontrol. Construction of the second data centre is expected to begin in 8-10 weeks and the facility will be ready in two years, he said.

In 2020, DLF made a comeback in the Noida market with a data centre and an IT Park in Sector 143 on the Noida-Greater Noida Expressway. The real estate company leased about 360,000 sq. ft of space at the upcoming Noida IT Park to ST Telemedia in 2020, with the option of doubling it.

The cost of building the first data centre was about Rs 130 crore and DLF expects to get the occupancy certificate for it soon.

“ST Telemedia had approached us to do a second data centre for them,” he said.

DLF said in April that it will invest close to Rs 1,700 crore to develop about 3.7 million sq. ft of office space and a data centre in Noida. DLF has pre-leased over 50 percent of its under-construction IT Park in Noida.

Office towers

DLF has also planned two office towers in the project and 50 percent of the space there has already been leased, Khattar said.

“This is a large facility of 25 acres. We have completed one data centre and we are about to complete one office tower which is about 415,000 sq. ft out of which 290,000 is already leased. We should be completing it and getting the occupancy certificate in the next three months. The company that has leased the space is expected to move in the moment we get the OC,” he said.

The second tower is still in the planning stage.

“We have not yet decided when to start construction on that. Investment so far for the tower is around Rs 140-150 crore,” he said.

Data centres are becoming an asset class following the emergence of segments such as co-working, co-living and warehousing. With India mandating that companies store data of Indian citizens locally, real estate companies are looking at adding data centres to their portfolios.

In June, the Uttar Pradesh government approved a plan to set up four data centres in the state at a cost of Rs 15,950 crore, which it said would create 4,000 direct or indirect jobs. The state’s data centre policy offers incentives such as capital subsidy, interest subvention, stamp duty exemption, and other non-financial incentives, apart from energy-related financial incentives.

Greater Noida is all set to attract investments of about Rs 8,000 crore for data centres, with Rs 7,000 crore from the Hiranandani Group’s Yotta Infrastructure and Rs 1,000 crore from Japan’s NTT Global.

The Greater Noida Industrial Development Authority (GNIDA) has leased 20 acres of land in Knowledge Park V to Mumbai-based NIDP Developers to set up a data centre park.

Over 45 data centres spanning around 13 million sq. ft and 1,015 MW of IT capacity are expected to come up in India by 2025-end, half of which will be in Mumbai alone, a report said.

In terms of IT capacity, over 69 percent of this planned new supply will come up in Mumbai and Chennai, with 51 percent in Mumbai alone. Currently, there are 138 data centres in India with 11 million sq. ft and 737 MW of IT capacity. At least 57 percent of this IT capacity is in Mumbai and Chennai collectively.

Expansion by existing and new data centre companies is expected to result in an additional capacity of 804 MW during 2022-2024, translating into 34 percent CAGR for the period, according to India’s Data Centre Report Card 2021 released by Jones Lang LaSalle.

This would mean the creation of 9.7 million sq. ft of real estate space for this new capacity across India’s leading cities, it said.

Vandana Ramnani
Vandana Ramnani
first published: Sep 12, 2022 03:22 pm