Recently, CapitaLand India Trust Management, the trustee-manager of CapitaLand India Trust (CLINT), announced an investment of `1,940 crore to develop its third data centre in India (to come up in Ambattur, Chennai).
The data centre industry’s demand for real estate space will be high over the next two years. India is expected to add 681 megawatt (MW) capacity by the end of 2024, leading to a doubling of capacity to 1,318 MW, which will need 7.8 million sq ft of real estate space.
As 2022 comes to an end, the supply is expected to exceed the 2021 levels by a healthy margin. The data centre industry is expected to close the year with a robust demand growth with estimated absorption in the range of 150-170 MW, which is due to the delivery of pre-committed supply to hyper scale cloud service providers (CSP).
Co-location (Colo) operators are scaling up construction to meet the delivery targets. Some operators adopted retrofitting existing buildings to reduce the time of delivery, according to a JLL India report called ‘The 2022 story: Indian real estate’s rise from the lows’.
“Supply is mostly concentrated in Mumbai due to submarine cable connectivity, power availability and a large user market, and Mumbai is expected to account for 57% of the new supply followed by Chennai at 25%. Increasing digitisation is expected to save costs and make organisations resilient in times of uncertainty, which will be one of the key drivers of data centres’ growth in India. The impact of 5G rollout, personal data protection legislation and investment incentives are expected to drive multi-year growth of Indian data centres,” said Rachit Mohan, head, (data centre advisory), India, JLL
The increase in demand is being driven by the increasing use of digital services by BFSI (banking, financial services and insurance), manufacturing, public sector, media, gaming, among others.
Recently, CapitaLand India Trust Management, the trustee-manager of CapitaLand India Trust (CLINT), announced an investment of `1,940 crore to develop its third data centre in India (to come up in Ambattur, Chennai).
Last month, Blackstone, a global private equity investor, announced the start of its data centre business in Asia from India, under Lumina CloudInfra, and has plans to scale it up to 600 MW over the next two years through presence in five locations – Mumbai, Chennai, Delhi-NCR, Hyderabad and Pune.
In India, Japanese firm NTT in May announced an expansion of its data centre footprint in India to 12 facilities, with more than 2.5 million sq ft and 220 MW of facility power. Yotta Infrastructure, Hiranandani Group’s data centre business, currently has two operational data centres — one in Greater Noida that it launched earlier this month, and another in Navi Mumbai, with a capacity of 160 MW each. Also, Nxtra by Airtel, a subsidiary of Bharti Airtel, has plans to invest `5,000 crore by 2025 to triple its data centre capacity to 400 MW.
Reliance Jio is also understood to have plans for a 200 MW data centre campus with a $950-million investment outlay in Delhi-NCR. In 2019, the Adani Group had announced a `70,000-crore investment in this asset class. In addition, Brookfield and Everstone have also announced multi-million dollar investments in data centres in India over the last two years.
According to the findings of the report, India with its vast geographical resources, thrust on renewable energy, increasing submarine cable connectivity and cost-competitiveness is likely to emerge as an alternative data centre hub, when a sharp rise in temperatures is leading to unprecedented drought-like conditions in Europe, and high rainfall in other countries is proving to be an operational challenge for existing data centres.
“This coupled with supply chain disruption caused by the geo-political crisis have added to the complications. The supply disruption of sources of power generation like crude and gas has led to a rethink among data centre players in setting up capacities,” the report said.
In addition, 5G network is likely to increase speed 10x and smart devices are likely to result in a significant rise in demand for data. 5G is projected to account for almost 40% of India’s mobile subscriptions – 500 million – by the end of 2027 with average data usage of 50 GB per month, which will fuel data centre demand. Increasing digitalisation will also drive data consumption exponentially.
https://www.financialexpress.com/industry/data-centre-growth-to-fuel-realty-demand/2927220/
