Chennai expected to see

Chennai expected to see 134 MW* capacity addition
by 2025 year: JLL

 

• The city emerges as second fastest growing market after Mumbai
• Ambattur and Siruseri in Chennai continue to be growth districts for data center
• The city remains to attract enterprise demand and expected to be next frontiers for growth of cloud customers

Note: MW*- indicates IT design power load

  Chennai is expected to see second highest capacity addition due to its advantages of cable landing stations and low development costs according to JLL’s H1 2020 ‘re(Imagine) Data Centers Running India’s digital economy’ report. The city is expected to attract more players due to low land and construction cost. Further, the city has lowest vacancy of 6% due to limited supply and increasing demand. While Mumbai is expected to see highest capacity, Chennai will be the next frontier for growth of cloud customers and will command higher rentals due to demand from enterprises according to the report.

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. Chennai is all set to become the second major hub for data centres in India. The primary reason for this trend is the submarine cable landing in Chennai and the city’s geographical proximity to key Asian cities,” said Siva Krishnan, Managing Director – Chennai, JLL. 

India’s data canter industry has provided immense boost to the digital economy during H1 2020. Daily data consumption rose from an average of 270 petabytes (PB) during pre-lockdown period to an average of 308 PB post lockdown period registering a 14% rise.

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 is the highest data consumer. In terms of total capacity addition, there has been an increase of 8% in H1 2020, taking India’s total colocation capacity to 375 MW. H1 2020 witnessed supply addition of 27 MW, which is 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 as 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 to be a 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 Centre industry is thus expected to travel through an interesting transition phase in terms of operators, locations and technology as the world’s second largest data subscriber population increasingly adapts to a new digital world.