A recent report by Colliers has placed the investment potential into India’s thriving data center industry at a whopping US$ 10 Billion over the next three years. Colliers is a leading real estate, diversified professional services, and investment management company. It came up with the report titled India Data Centers: Entering Quantum Growth Phase in association with the Confederation of Indian Industry (CII). The report was launched at the Second Edition of the CII Conference on Tech in Real Estate that was held in Mumbai recently.
According to the report, India’s data center stock is likely to double to 23 million sq ft, translating to a total investment potential of USD10 Billion over the next three years across the top seven cities. It says, “As of August 2023, the data center capacity across the top 7 cities stands at 819 MW, spread across 11.0 million sq feet. As the country continues its digital revolution, the demand for data storage, processing, and management continues to rise.”
The report further said, “India’s internet economy, expected to register a six-fold growth, reaching US$ 1 Trillion by 2030, will be fundamental to the quantum acceleration envisaged across data centre clusters within the country. As India continues its digital revolution, the demand for data storage, processing, and management is expected to witness an unprecedented surge in next 2-3 years, leading to a doubling of its existing capacity in a relatively shorter span.”
Ramaiy Kapoor, Managing Director, Data Center, Colliers, India, said, “Indian data center market propelled by tail winds of digitization, on premise to Colocation shift, data localization and Generative AI demand, will see a quantum leap in the construction, delivery and absorption of Data Center space.” He further said, “Data Center as an asset class is proving to be a play with high yield and lower risk once stabilized, with sticky customers which enables patient institutional capital to write larger cheques.”
In a statement released, Colliers also said, “Led by exponential increase in data consumption, improving regulatory framework and robust investments in the sector, the data center capacity is likely to double up faster in the next phase of growth, crossing 1,800MW by 2026.”
Vimal Nadar, Senior Director & Head of Research, Colliers India reiterated this saying, “Over the next 3 years, the sector is likely to see US$ 10 Billion of investments, resulting in doubling of the data center capacity to 1800 MW. Interestingly, 30-35% of the total investments will translate into business opportunity for real estate players in the data center space including land and construction.”
According to the report, Mumbai remains the top data center location of choice in India. It further predicts that about half of the upcoming supply during 2023-26 will be located in Mumbai, followed by Chennai and Hyderabad. While Tier 1 cities are still preferred locations, Tier 2 cities such as Ahmedabad, Jaipur, Kochi, Nashik, Vijayawada and Bhubaneshwar are also witnessing steady growth.
