RMZ Corp, Colt ink joint venture, to invest $1.7 billion in 3 data centres

The joint venture partners will invest $1.7 billion into three data centres

Bengaluru-based real estate firm RMZ Corporation's subsidiary RMZ Digital Infrastructure Partners on November 19 announced a joint venture with British firm Colt Data Centre Services, marking their entry into the data centre space.

They will invest $1.7 billion, a mix of debt and equity, to develop three data centres, two of which are under construction in Navi Mumbai and Chennai.

The site for the third has not been finalised but Pune and Hyderabad are among the cities being looked at, Quy Nguyen, Colt Data Centre Services' chief sales officer, said.

The Navi Mumbai centre will have a capacity of 134 megawatts (MW) and the Chennai facility 80 MW. The three centres will have a combined capacity of 250 MW over the next three to five years, Nguyen added.

The joint venture may also look at acquisitions to expand quickly, RMZ Infrastructure chief executive officer Deepak Chhabria said.

While concerns about high levels of power consumed by data centres are universal, most states welcome these investments, as they help in creating high-paying jobs. Power availability in most states is largely adequate, he said.

The Indian data centre market is as competitive as the company's key western European market, with rentals in India around half those of its facilities in Europe, Nguyen said.

While the risk of oversupply remains, the emphasis on artificial intelligence by enterprises as well as data hyperscalers remains a demand driver.

"The market can be choppy over the next few years in India, where some (data centre players) may not survive,” Nguyen said.

Hyperscalers build around 50 percent of their capacity, while they partner with others for the rest. They generally buy capacity in waves, he said. Without the focus on AI, the risk of oversupply would be a worry but with enterprises embracing artificial intelligence, there’s enough demand for everyone, Nguyen said.

According to CBRE, India’s data centre market value is expected to reach nearly $11 billion by 2027, growing at a compounded annual growth rate of 15 percent.

The growth, so far, has been powered by data hyperscalers, which are the large-scale cloud and data providers such as Amazon Web Services and Google Cloud as well as third-party operators. A number of real estate firms in India have entered the market to tap into AI and data localisation opportunities.