Property consultant JLL India expects this increasing demand to offer a greenfield development opportunity of 6 million sq ft to the real estate sector by 2023.
India’s co-location data centre industry witnessed an unprecedented absorption of 102 MW in 2020 as Covid-19 fuelled an unparalleled demand for internet connectivity — both on the professional and personal front. Property consultant JLL India expects this increasing demand to offer a greenfield development opportunity of 6 million sq ft to the real estate sector by 2023.
“India’s data centre sector will require investment of $3.7 billion (around Rs 27,000 crore) over the next three years in order to fulfill the 6-million sq ft greenfield development opportunity for the industry,” JLL India said in a report.
The industry witnessed an unprecedented absorption of 102 MW during 2020, notching up absorption higher than most key markets of Europe and America, JLL India head (data centre advisory) Rachit Mohan said.
According to the Nokia Mobile Broadband India Traffic Index 2021, the overall data usage rose by 36% in 2020 due to increased smartphone usage and fixed wireless access.
As the data centre landscape continues to evolve, the industry is expected to grow exponentially to reach 1,007 MW by 2023 from 447 MW. With growing reliance on digital connectivity, the demand is likely to ramp up further due to the upcoming 5G roll-out, IoT-linked devices, data localisation and cloud adoption, the report noted.
Mumbai and Chennai are expected to drive 73% of the sector’s total capacity addition during 2021-23, with other cities like Hyderabad and Delhi NCR emerging as new hotspots, it added.
JLL India’s head of research Samantak Das explained that the expected addition of 560 MW during 2021-23 would be complemented by densification of racks and servers, sustainable energy sourcing and use of indigenous resources.
“Rising demand is leading operators to pursue ambitious expansion plans, while some are adopting the acquisition route to enter Indian markets. Various policies and reforms brought in by the government with an aim to turn India into a global data hub have provided necessary measures to achieve this goal,” he added.
While companies are evaluating their India entry and building a footprint through acquisitions and local partnerships, hyper-scalers are focusing on expansion with self-perform strategies like land- banking and scalable modular designs. DC operators have acquired over 340 acres until now with plans to further scale up, considering the long-term growth prospects of the industry.