India’s data centre market is expected to double in next three years. After growing by leaps and bounds in the past five years, the pace of launch of new data centres is here to stay. As per a latest report by Canadian professional services and investment management major Colliers, local data centre stock will double to 20 million square-feet by 2025.
Data shows, since 2017, when the Indian government turned its focus on localisation of data storages and pushed companies managing data from Indian consumers to set up data centres inside India’s territory, a massive jump in new data centres have been recorded. Between 2017 and 2022, data centre stock (the area over which data centres are spread) has jumped by a whopping 282 per cent. From 2.7 million sq.ft. in 2017, the data centre stock is expected to grow to 10.3 million sq.ft. or 3-fold by end-2022.
According to analysts at Colliers, India currently has about 770 MW data centre capacity across top seven cities. The growth of data centres in India is led by massive explosion of data consumption through digitisation and increased cloud adoption over the last two years. At the same time, data centre operators are enthused by the incentives such as subsidised land and stamp duty exemption provided by several states.
Since 2020, data centres have received cumulative investments of US$ 10 billion or Rs 80,000 crore and have seen surging partnerships between developers and global operators. The investments are from global data centre operators looking to expand into India, investments from corporates and real estate developers, and private-equity funds. Rising data consumption, coupled with favourable government policies have spurred investments in the sector in the last 2-3 years.
“Data centres are capital intensive and investors with a long-term horizon are exploring this asset class. While real estate costs are only about 25 per cent, there is ample opportunity for developers and investors in this space. At the same time, there is now a greater need to make data centres more sustainable. At present, only 22 per cent of the existing data centre stock is LEED-certified. Global operators are increasingly investing in low-carbon and energy efficient technologies to reduce the impact on the environment and achieve optimum efficiency,” said Ramesh Nair, Chief Executive Officer, India and Managing Director, Market Development, Asia, Colliers.
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