A recent report by Savills, a global property advisory firm, has revealed that Indian data centers added approximately 71 MW of IT capacity in the first half of this year (H1-2024). The report also found that the total stock has increased by 21 percent year-on-year (YoY) from 778 MW in H1 2023 to 942 MW in H1 2024.
The report also found that the market witnessed transactions totaling around 200 MW in IT capacity during this period, and that the demand was driven by hyperscalers, Banking, Financial Services, and Insurance (BFSI), IT & ITeS, and service sectors, all relying heavily on data centre operators for colocation and related services.
Mumbai still remains the queen of the Indian data center market with 54.9 percent of the total capacity, followed by Chennai (12.3%), Bengaluru (8.2%), and Pune (7.2%). According to the report, hyperscalers accounted for 22 percent of the total stock, while enterprises held 10 percent. The remaining 68 percent was utilized by a combination of hyperscalers and enterprises, showcasing a diverse utilization pattern within the data centre industry.
“We project a strong demand for data centre capacity in India by the end of 2024, with an estimated requirement of 400 MW across major cities. While supply is expected to reach 350 MW during the same period, data centre operators are expanding their service offerings beyond colocation to include networking, cloud solutions, specialized hardware like GPUs, and other managed services,” said Srihari Srinivasan, Director & Lead Data Centre Services, Savills India. He further explained, “This growth is being driven by surging internet usage, the rise of 5G and the need for ultra-low latency for mobiles, which is also creating a growing demand for edge data centres in specific areas. Furthermore, increasing adoption of AI and IoT across various industries is fueling the need for data centre services, with GPU-powered solutions playing a key role in addressing these demands.”
The findings are in line with reports from other similar real estate and research agencies that appear upbeat about India’s data center industry. For example, a report by Jones Lang LaSalle (JLL) revealed that the Indian Data Center industry could attract investments worth US$5.7 Billion by 2026 due to a surge in demand caused by the Artificial Intelligence (AI) boom and increase in 5G data consumption. The report also predicted that the industry capacity would grow to 1,645 MW by the end of 2026, with Mumbai and Chennai to account for 81 percent of the new capacity additions. Similarly, a report by Cushman & Wakefield revealed that by 2028, India will have 3X installed capacity with a total IT load of 3.29 GW.