Key data center operators are eyeing cities like Vijayawada, Nagpur, Raipur, Kochi, Patna, and Mangalore as potential locations
By 2025, data center stock of India is likely to double to about 20mn sq. ft. from the current 10.3mn sq. ft., according to Colliers’ latest report “Data center: Scaling up in Green age.”
Across the top seven cities, India currently has about 770 MW data center capacity. Over the last two years, through digitization, increased cloud adoption, etc., the growth of data-centers in India is led by a massive explosion of data consumption. Data center operators, at the same time, are enthused by the incentives such as subsidized land, stamp duty exemption, etc. provided by several states.
“India is getting positioned as a hub for data-centers across APAC. With the challenge of expansion in other developed markets like Singapore, India is taking a steady growth-linked expansion, connected directly with end-user consumption. Edge data-centers coupled with the 5G launch is going to create additional opportunities in expanding the data-centers footprint across the country,” said Rao Srinivasa, Managing Director, Data-Centers, ProjectManagement at Colliers India.
According to the report, benefitted from the presence of a landing station and submarine cable connectivity, Mumbai accounted for the largest share of data-centers at 49%. Followed by Bengaluru, Delhi-NCR has about 17% of the total data center capacity.
Data-centers, since 2020, have received cumulative investments of $10bn, and have seen surging partnerships between developers and global operators. The investments are from global data center operators looking to expand into India, investments from corporates and real estate developers, and private-equity funds.
“Data-centers are capital intensive and investors with a long-term horizon are exploring this asset class. While real estate costs are only about 25%, there is ample opportunity for developers and investors in this space. Edge data-centers are the next big opportunity in India, as these data-centers support the sustainable transition of data-centers through smaller footprint, and lower energy consumption,” said Ramesh Nair, Chief Executive Officer, India and Managing Director, Market Development, Asia, Colliers.
According to the report, Tier-II cities are also witnessing traction, while metro cities remain core hubs for data-centers. For setting up edge data-centers and as disaster recovery sites, key data center operators are eyeing cities like Vijayawada, Nagpur, Raipur, Kochi, Patna, and Mangalore as potential locations. Currently, Tier-II cities hold only 3% of the total data center stock in India.
“Hyperscalers are also rapidly gaining ground and ramping up their investments in India as they plan to set up multiple data-centers across key cities. Realizing the market potential and abundance of opportunities in India, investments in data-centers are likely to remain popular amongst investors.” said Vimal Nadar, Senior Director, Research, Colliers India.
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