India is on the cusp of a data centre expansion, set to potentially double its capacity to 23 million sq ft within three years. A recent report, "India Data Centers: Entering Quantum Growth Phase," by Colliers India and CII, unveiled this promising outlook, projecting a $10 billion investment opportunity across seven leading cities. The report covers key cities, showcasing their IT load capacity, emphasizing the pivotal role of real estate in India's economic growth, and the growing importance of ESG standards in the real estate sector. With factors like data consumption and regulatory changes, data centre capacity could reach 1,800MW by 2026, led by Mumbai, Chennai, and Hyderabad. Tier-II cities also emerge as potential data centre locations, signifying India's digital transformation and the vital role of both Tier I and Tier II cities.
India is on the brink of a significant expansion in its data centre capacity, with projections indicating a potential doubling to 23 million sq ft within the next three years. This growth trajectory, as highlighted in a recent report by Colliers India and the Confederation of Indian Industry (CII), suggests an investment potential of $10 billion across the nation's leading seven cities.
The comprehensive report, titled "India Data Centers: Entering Quantum Growth Phase," was presented during the CII Conference on Tech in Real Estate's second edition held in Mumbai on October 12. The data encapsulates insights from seven major cities: Bengaluru, Delhi-NCR, Mumbai, Pune, Hyderabad, Chennai, and Kolkata. It provides a holistic view of the IT load capacity, encompassing both occupied and vacant spaces.
Dr. K Nandakumar, Chairman of the CII Maharashtra State Council and CMD of Chemtrols Industries, emphasized the pivotal role of real estate in India's economic expansion by 2047. According to him, the burgeoning economic growth will inevitably amplify demand across various asset classes, from residential and commercial to warehousing and industrial land developments. This growth will be in tandem with the evolving needs of the economy and individual consumption patterns.
Highlighting the global shift in real estate towards sustainability, Dr. Nandakumar underscored the increasing importance of Environmental, Social, and Governance (ESG) standards. These standards are now integral in assessing the long-term sustainability and ethical practices across diverse industries, including real estate.
As of August 2023, the combined data centre capacity of these seven cities stands at 819 MW, spanning 11.0 million sq ft. Factors such as a surge in data consumption, an enhanced regulatory environment, and substantial sector investments are propelling this capacity to potentially reach 1,800MW by 2026.
The report further elaborates on Mumbai's dominant position, accounting for half of India's data centre capacity. While cities like Chennai, Bengaluru, and Delhi-NCR are already established markets, Kolkata is emerging as a regional data hub.
Over the next three years, Mumbai is anticipated to lead in new additions, driven by its advanced submarine cable connectivity, landing stations, and internet exchanges. Chennai and Hyderabad are also poised for significant growth, backed by robust infrastructure and a supportive regulatory landscape.
Although Tier I cities remain the top choice for data centre expansions, Tier-II cities are not far behind. They currently account for a mere four percent of India's total data centre capacity. Yet, major operators are exploring cities like Ahmedabad, Jaipur, Kochi, Nashik, Vijayawada, and Bhubaneshwar for potential Edge data centres and disaster recovery sites.
In conclusion, India's data centre landscape is undergoing a transformative phase, with major cities poised for unprecedented growth. As the nation gears up to meet the digital demands of the future, it's clear that both Tier I and Tier II cities will play a crucial role in shaping this digital revolution.
This story was earlier published in ET Realty
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