Data centre industry to touch 1007 MW by 2023; Mumbai, Chennai expected to drive 73% of capacity addition: JLL

Data center sector will require an investment of $3.7 billion over the next three years to fulfil the 6 million sq. ft greenfield development opportunity for the industry

With the growing reliance on digital connectivity on account of COVID-19 and work-from-home phenomenon, the data centre industry is expected to grow exponentially to reach 1,007 MW by 2023 from its existing capacity of 447 MW, said JLL in its report titled 2020 India Data Center Market Update.

Demand is likely to ramp up further due to the imminent rollout of 5G, IoT-linked devices, data localisation and cloud adoption. India’s data centre sector will require an investment of $3.7 billion over the next three years to fulfil the 6 million sq. ft greenfield development opportunity for the industry, it said.

Mumbai with 199 MW IT load is the leading data centre hub of the country with nine internet cable landing and an assured power supply. Its capacity is expected to grow by 2.65x to 529 MW by 2023, it said.

Navi Mumbai hub is expected to account for 83% of capacity additions in Mumbai.

Mumbai and Chennai are expected to drive 73% of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR emerging as new hotspots. Robust pre-commitments by global cloud players in the established markets of Mumbai and Pune continues owing to prevailing infrastructure, while new markets like Hyderabad are gaining momentum in this space, it said.

“Mumbai is the most preferred destination for cloud players with a 60% share of the occupied space due to its excellent infrastructure support. The state has provided various incentives for setting integrated data center parks. The new supply additions in the city are backed by pre-commitment from cloud players. The city’s strong demand is driven by BFSI, media and IT/ITes companies. leading to high occupancy levels of 95%,” said Karan Singh Sodi, Regional Managing Director – Mumbai, JLL India.

“India’s colocation data center industry witnessed unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America. Fuelled by longer-term trends of rising cloud adoption, increasing digitalisation and progressive legislation, we anticipate increased demand for colocation space nationwide. Colo capacity grew by around 28% to reach 447 MW in 2020 from 350 MW in 2019,” said Rachit Mohan, Head, Data Center Advisory (India), JLL.

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