Investors (re)imagining India data center market as capacity
expected to triple by 2025: JLL
Data center market presents an investment opportunity of USD 4.9 bn during next five and half years ending 2025
- India’s 375 Megawatt (MW)* data center industry kept digital economy working during the lockdown
- 14% rise in data consumption during the lockdown period starting last week of March 2020
- 9.3 mn. sq.ft. additional space needed during 2020-25 for new data centers
- 43% of utilised colocation capacity occupied by Public cloud; Mumbai leads with largest share
Note: Megawatt (MW)*: indicates IT power load
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’s H1 2020 ‘re(Imagine) Data Centers Running India’s digital economy’ report, the impact of data protection laws, increased shift from captive to colocation (colo) data canters and implementation of new technologies like 5G, edge computing and the internet of things (IoT) will drive sustained investor demand for this asset class over the next five years.
“India’s data center market will outperform over the next five years, supported by a combination of growing digital economy, increased investor interest and stable long-term returns. Growth in the sector 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. 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,” said Ramesh Nair, CEO & Country Head, India, JLL.
India’s data canter industry has provided immense boost to the digital economy during H1 2020. From an average 270 petabytes (PB) to 308 PB during week of March 22nd, a 14% rise in daily data consumption was observed during the lockdown.
There was a 12% rise in data consumption in Andhra Pradesh and Bihar, while there was a 7% increase in data consumption in Maharashtra which was the highest amongst other states. In terms of total additional supply, there has been an increase of 8% in H1 2020, taking India’s total colocation capacity to 375 MW. H1 2020 also witnessed supply addition of 27 MW, 56% of the total addition seen in 2019 (48 MW). Mumbai continued its lead 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. Given shifts in the economy, we will continue to see data consumption increase manifold for the foreseeable future,” 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 continues to be the preferred choice for large cloud players because of its infrastructure advantage. Chennai is also proving an attractive destination due to its advantages of submarine cable landing stations and low development costs.” says Dr Samantak Das, Chief Economist and Head of Research & REIS, JLL India
India’s data center industry is expected to accelerate its transition, says JLL, with operators, locations and technology adapts to the reimagine digital world.