India’s Data Center Stock Set to Double to 23 Million Sq. Ft in 3 Years: Colliers-CII Report

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    The Colliers India-Confederation of Indian Industry (CII) has released a report titled “India Data Centers: Entering Quantum Growth Phase,” forecasting a significant expansion in India’s data center stock over the next three years. The report, unveiled during the Second Edition of the CII Conference on Tech in Real Estate in Mumbai on October 12, reveals several key findings.

    India’s data center capacity is expected to double, reaching 23 million square feet, which translates to an investment potential of $10 billion across the top seven cities. These cities include Bengaluru, Delhi-NCR, Mumbai, Pune, Hyderabad, Chennai, and Kolkata. Currently, these cities collectively account for 819 MW of data center capacity spread across 11 million square feet, encompassing both occupied and unoccupied spaces.

    The report underlines that the Indian economy’s expansion, forecasted to be multifold by 2047, will be significantly bolstered by the real estate sector. The growth in demand for various asset classes, such as residential, commercial, warehousing, and industrial land developments, will correspondingly increase to meet the economic and consumption needs of individuals. The report highlights the growing importance of Environmental, Social, and Governance (ESG) factors in the real estate sector, indicating a paradigm shift towards sustainability.

    India’s data center market is being driven by an exponential increase in data consumption, an improved regulatory framework, and robust investments. It is anticipated that the data center capacity will double in the next growth phase, reaching 1,800 MW by 2026. This growth is further propelled by the preference for Tier I cities, which are already established data center markets.

    Mumbai remains a mature data center hub, hosting half of the country’s data center capacity. Other cities like Chennai, Bengaluru, and Delhi-NCR are also established markets, while Kolkata is an emerging hub catering to regional data requirements. Over the next three years, Mumbai is expected to witness significant growth, accounting for about half of the new additions. This growth is attributed to factors like submarine cable connectivity, landing stations, and internet exchanges. Additionally, Chennai and Hyderabad are also expected to experience growth due to strong support infrastructure and a favorable regulatory environment.

    While Tier I cities continue to be preferred locations for data center expansion, Tier-II cities are also showing steady growth. Currently, Tier-II cities represent only four percent of India’s total data center capacity. The report notes that key data center operators are exploring multiple cities, including Ahmedabad, Jaipur, Kochi, Nashik, Vijayawada, and Bhubaneshwar, as potential locations for establishing Edge data centers and disaster recovery sites.

    So, the Colliers-CII report anticipates significant growth in India’s data center market, driven by factors such as increasing data consumption, improved regulations, and substantial investments. While Tier I cities remain popular, Tier-II cities are emerging as attractive locations for data center expansion. This expansion represents a substantial investment opportunity for the Indian data center industry.

    Also Read: India’s Office Leasing Soars 5% to an 18-Month High in Q3 2023 Despite Global Challenges

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