India’s data center capacity to surge with $4.9 bn investment

India’s data center capacity is expected to grow from 375 MW in H1 2020 to 1,078 MW by 2025, presenting a USD 4.9 billion investment opportunity, according to JLL.
India data center capacity forecastThe impact of data protection laws, shift from captive to colocation data canters and new technologies like 5G, edge computing and internet of things (IoT) will drive investor demand for this asset class over the next five years.

“India’s data center market will be further powered by colocation sites which, via, lower upfront costs, heightened data security, uninterrupted services and scalability will, further, influence investors to reimagine the potential of India’s data canter space,” said Ramesh Nair, CEO and country head, JLL India.

The 703 MW expected capacity additions is translating to 9.3 million sq. ft. of space, which will open up greenfield investments for real estate developers and investors to fuel the future development of the sector.

India’s data canter industry has provided boost to the digital economy during H1 2020. From an average 270 petabytes (PB) to 308 PB during week of March 22nd, a 14 percent rise in daily data consumption was observed during the lockdown.

There was a 12 percent rise in data consumption in Andhra Pradesh and Bihar, while there was a 7 percent increase in data consumption in Maharashtra which was the highest amongst other states.

Additional supply has increased 8 percent in H1 2020, taking India’s total colocation capacity to 375 MW. H1 2020 witnessed supply addition of 27 MW, 56 percent of the total addition seen in 2019 (48 MW). Mumbai is leading with addition of 19 MW, followed by Bengaluru at 5 MW and Delhi NCR at 3 MW.

“Powered by the transition to work from home arrangements during lockdown, the country’s data center industry became the backbone of the digital economy and ensured a level of business continuity and sustained large portions of the country’s education system,” said Rachit Mohan, India head, Data Center Advisory, JLL.

The dependence of several industries on digital infrastructure has partially helped mitigate the impact of the lockdown with IT/ITeS, Banking and Financial Services, e-commerce, capital markets, social media and education remained operational.

Mumbai is expected to see highest capacity addition as it is the preferred choice for large cloud players because of its infrastructure advantage. Chennai is an attractive destination due to its advantages of submarine cable landing stations and low development costs, says Samantak Das, chief economist and head of Research & REIS, JLL India