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Nearly 9.3 million sq ft of real estate space to be developed for data centre industry by 2025: JLL India

Data center market presents an investment opportunity of 4.9 bn dollars during next 5.5 years

Representative image

Representative image

The data centre industry is expected to add 703 MW capacity by the end of 2025, translating into an opportunity of 9.3 million sq ft of real estate development, a new report has stated.

These capacity additions would require greenfield investments of $4.9 billion to fuel the future development of the sector, the report, titled 're(Imagine) Data Centres Running India’s digital economy,' by JLL said.

Mumbai is expected to garner a significant share of this impending opportunity of around 370 MW owing to its existing data centre infrastructure, followed by Chennai, with a capacity addition of 134 MW, due to its advantages of submarine cable landing stations and lower development costs.

India’s data centre industry has provided immense boost to the digital economy during H1 2020. Daily data consumption rose from an average 270 petabytes (PB) to 308 PB during the week of March 22. During the lockdown, a 14 percent rise was seen in daily data consumption.

There was a 12 percent rise in data consumption in Andhra Pradesh and Bihar, while there was a 7 percent increase in data consumption in Maharashtra.


In terms of total additional supply, there has been an increase of 8 percent in H1 2020, taking India’s total colocation capacity to 375 MW. H1 2020 also witnessed supply addition of 27 MW, 56 percent of the total addition seen in 2019 (48 MW). Mumbai continued its lead with addition of 19 MW, followed by Bengaluru at 5 MW and Delhi NCR at 3 MW, the report said.

The impact of data protection laws, increased shift from captive to colocation (colo) data centres and implementation of new technologies like 5G, edge computing and the Internet of Things (IoT) will drive sustained investor demand for this asset class over the next five years, it said.

“India’s data centre market will outperform over the next five years, supported by a combination of growing digital economy, increased investor interest and stable long-term returns. Growth in the sector will be further powered by colocation sites which, via, lower upfront costs, heightened data security, uninterrupted services and scalability will, further, influence investors to reimagine the potential of India’s data centre space,” said Ramesh Nair, CEO & Country Head, India, JLL.

The dependence of several industries on digital infrastructure has partially helped mitigate the impact of the lockdown with IT/ITeS, banking and financial services, e-commerce, capital markets, social media and education remaining operational.

“Powered by the transition to work from home arrangements during lockdown, the country’s data centre industry became the backbone of the digital economy and ensured a level of business continuity and sustained large portions of the country’s education system. Given shifts in the economy, we will continue to see data consumption increase manifold for the foreseeable future,” said Rachit Mohan, India Head, Data Centre Advisory, JLL.
Moneycontrol News
first published: Aug 19, 2020 04:46 pm
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