India Colocation Data Centre industry to double to

 India Colocation Data Centre industry to double to 1008 MW by 2023: JLL

 The colocation data centre (DC) industry stood at 499 megawatts (MW) at the end of H12021

• Draft data protection bill and various Central and State Government policies to propel Indian data centre industry growth
• Personal Data Protection Bill to set the foundation for Indian colocation data centres

 Note: GW* and MW*- indicates IT design power load, Colocation refers to third party data centres

India’s colocation data centre (DC) industry is expected to double by 2023, according to JLL. The global real estate firm expects capacity to increase from 499 megawatts (MW) IT load in H1 2021 to 1008 MW by 2023. This, in turn, would lead to a requirement of over five million sq. ft of real estate, as per JLL research.

Mumbai and Chennai are expected to be leading DC hubs due to assured power supply, undersea cable landings and large user markets. One of the biggest enablers for the growth will also be the approval of the draft Personal Data Protection Bill (PDP) by the joint Parliamentary Committee, which JLL believes will represent a major milestone for India’s colocation DC industry, which largely provides IT infrastructure for storage and computing requirements.

“The importance of information in form of data has gained prominence over the years with the entire digital revolution being driven by the usage of data. The colocation industry is expected to benefit from the legislation due to the prerequisite for data storage in the country. The potential of the industry is evident from the fact that three central legislations and four states have enacted data centre sector policies while four more states are in the process of notifying their policies,” said Rachit Mohan, Head, Data Center Advisory – India, Co-Head, Office Leasing Advisory – Mumbai, JLL

The Central Government has outlined the importance of the sector by formulating a Data Centre Park Policy and the creation of four Data Centre Economic Zones that aims to make India the global DC hub.  The draft policy aims to accord “infrastructure” status to the sector bringing in the benefits of availing long-term credit from domestic and international lenders.

“The increasing digital economy has also necessitated regulations to protect the right of Indian users by storing the details of the digital transaction locally. The Reserve Bank of India has issued a directive imposing data localisation requirements on service providers/intermediaries / third-party vendors and other entities in the payment ecosystem. The financial regulator has issued various directives for financial intermediaries to comply with the localisation provisions. The local storage of digital transactions has already led to an increase in demand for data centres from the BFSI sector,” said Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.

Various states have realised the potential of the industry and have created special provisions for the industry. Maharashtra, Uttar Pradesh, Telangana, and Orissa have dedicated DC policy while West Bengal, Tamilnadu, Karnataka and Haryana have notified DC Regulations.

Maharashtra was one of the first states to include Data Centers in their Industrial Policy. The State announced integrated Data Centre Policy in 2019. As per the policy, five integrated DC parks would be eligible for financial incentives and duty waivers with minimum investment of INR.1500 crores by the developer company.

Telangana took an early lead when it announced significant initiatives in the Information and Communication Technology policy nearly five years back in 2016. Despite the lack of cable landing stations, the state has provided other incentives like land availability and power at lower cost along with other tax waivers for DC operators.

Uttar Pradesh which has been successful in establishing Noida as the growing commercial and industrial hub introduced the DC policy in 2021 intending to set up 250 MW Data Centre industry. The policy has provided subsidies on land procurement, capital and interest rates and non-financial incentives. The state of Odisha has also provided incentives in form of land fees and electricity subsidy and other financial incentives.

The importance of the DCs as the backbone for digital growth has led to other states drafting policies to attract DC players. West Bengal, Tamilnadu, Karnataka and Haryana have announced their draft policies and are expected to be notified into regulations. India being the second largest mobile user population globally, lower data usage cost and fast-growing digital market augur well for the development of the industry.

Indian data center industry capacity to double by

 Indian data center industry capacity to double by 2023: JLL 

• Industry capacity expected to double from 499MW in H1 2021 to 1008 MW by 2023
• 92% year-on-year growth in third party data center (colocation) industry capacity addition at 51.8MW during H1 2021; Mumbai accounted for 49% share of the capacity addition
• Demand for colocation space is equivalent to 90% of supply addition during H1 2021

Note: GW* and MW*- indicates IT design power load

India’s data center industry is expected to double capacity by 2023, says JLL. Capacity will exceed 1GW by 2023, driven by strong digitalisation, rising cloud adoption and ambitious growth plans of data center operators, according to JLL’s ‘H1 2021 India Data Center Market Update’ released today. 

Nationwide, the acceleration of digitalisation has forced enterprises to scale up their IT infrastructure. As a result of digital upgrades, a strong demand for colocation/cloud facilities, which offer scalability, security, and connectivity at lower costs, has been witnessed across India. Additionally, investors and global data center players have increased their commitment during the last six months in the India market by announcing joint ventures to meet expected demand. 

“The demand momentum which picked up pace in 2020, continues to grow unabated. The Indian data center industry witnessed 46.4 MW absorption during H1 2021 - equivalent to 90% of supply addition during the period (H1 2021), indicating robust absorption growth. Demand has been expanding rapidly due to increasing digital usage emerging from distributed workforce, growing data security concerns and business disruptions. Banking and financial services are adopting hybrid options to meet digital growth. Home-grown video and gaming platforms in midst of robust user growth are also fuelling the data center industry demand. Furthermore, telecom players are formulating the roll out of 5G which is expected to drive exponential growth in data consumption,” said Rachit Mohan, Head, Data Center Advisory – India; Co-Head, Office Leasing Advisory – Mumbai, JLL.

“Global investors and data center  players have increased their commitment during the last six months, announcing joint ventures with operators to setup sites. Investment commitments to the tune of USD 3 billion highlight the growth potential, with the data center industry expected to double its capacity and cross the 1GW* mark by 2023. Mumbai which currently accounts for 45% of the total capacity is expected to further add 267MW between now and 2023. Various states have also been providing incentives for data center industry as they want to join the next leg of technological change,” said Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.

Data center operators are adopting large land acquisition strategies to fulfil the long-term requirements of hyperscalers (large cloud players and occupiers with massive computing requirements). These operators would provide occupiers with flexibility in terms of availability zones, fiber pathways and power provisions required for large scale expansions in less time. Players are also adopting strategic alliances by investing in new submarine cables to meet the growing demand.

The telecom industry has been gearing for rolling out the 5G services with three providers starting field trials. The trend of sustainability has been gaining pace as tie-ups for green energy are being inked.

Chennai Data Center capacity to

 Chennai Data Center capacity to witness
2.5x growth to reach 133 MW* by 2023: JLL

 The city accounts for a 12% share of National data center capacity

• Preferred location due to four cable landings, reliable power supply and strategic location
• Ambattur and Siruseri to gain prominence as Data center hubs

 Note: MW*- indicates IT power load

Chennai data center capacity is expected to grow by 2.5 times to 133 MW by 2023 owing to demand from cloud players as per a JLL report titled ‘2020 India Data Center Market Update’.

“Chennai is expected to remain as leading data center destination due to its strategic location, four cable landings and reliable power supply. The city witnessed 16 MW absorption in 2020 primarily driven by demand from cloud players. The key data center hubs of Ambattur and Siruseri are expected to add 79 MW during 2021-23. Cloud players are expected to prefer high quality, scalable data centers facilities offered by the operators. The presence of IT/ITeS, BFSI and manufacturing sector is also expected to drive demand” said Siva Krishnan, Managing Director - Chennai & Coimbatore, JLL India.

“India’s colocation data center industry witnessed unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America. Fuelled by longer-term trends of rising cloud adoption, increasing digitalisation and progressive legislation, we anticipate increased demand for colocation space nationwide. Rising demand led data center operators and developers to pursue ambitious expansion plans, while some adopted the acquisition route to enter Indian markets, which we expect to continue. Colo capacity grew by around 28% to reach 447 MW in 2020 from 350 MW in 2019” said Rachit Mohan, Head, Data Center Advisory (India), JLL.

As the data centre landscape continues to evolve, the industry is expected to grow exponentially to reach 1,007 MW by 2023 from its existing capacity of 447 MW. With the growing reliance on digital connectivity, demand is likely to ramp up further due to the imminent rollout of 5G rollout, IoT-linked devices, data localisation and cloud adoption. India’s data center sector will require an investment of USD 3.7 billion over the next three years to fulfil the 6 million sq. ft greenfield development opportunity for the industry.

 

Mumbai and Chennai are expected to drive 73% of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR emerging as new hotspots. Robust pre-commitments by global cloud players in the established markets of Mumbai and Pune continues owing to prevailing infrastructure, while new markets like Hyderabad are gaining momentum in this space.

“India’s data center industry is expected to add 560 MW during 2021-23 leading to a real estate requirement of 6 million sq ft. The supply addition will be complemented by densification of racks and servers, sustainable energy sourcing and use of indigenous resources. Rising demand is leading operators to pursue ambitious expansion plans, while some are adopting the acquisition route to enter Indian markets. Various policies and reforms brought in by the Government to turn India into a ‘Global Data Hub’ has provided necessary measures to achieve this goal,” said Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.

The increasing usage of e-commerce, EdTech and digital transactions placed the existing IT infrastructure of enterprises under pressure. Overall data usage increased by 36% in 2020 due to increased usage of smartphones and fixed wireless access as per Nokia Mobile Broadband India Traffic Index 2021. Enterprises have been upgrading their IT infrastructure by adopting hybrid models, given their budget constraints. Technology trends like 5G rollout, IoT-linked devices and AI will also result in stronger growth in demand.

 According to JLL, the rapid growth of the data center industry has led to increased energy consumption and environmental impact. Increasingly, global cloud players setting up bases in India aim to reduce their carbon footprint and are looking at data centers that provide sustainable energy alternatives and are entering renewable energy power contracts. India’s renewable energy capacity at 90 gigawatts accounts for a 25% share of the installed power capacity and provides tremendous scope for the development of green data centers.

Mumbai is the preferred choice for large cloud players

Mumbai has witnessed highest capacity addition in H1 2020, as it continues to be the preferred choice for large cloud players according to JLL’s H1 2020 ‘re (Imagine) Data Centers Running India’s digital economy’ report released. The city also accounts for 62% of India’s total cloud capacity, followed by Pune and Chennai. Additionally, due to its infrastructural benefits, it continues to command premium for enterprise demand, followed by Hyderabad and Chennai. Further, the city is expected to witness the highest capacity addition of ~360 MW during 2020-2025, followed by Chennai with a capacity addition of 134 MW.

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. Within Mumbai, Navi Mumbai has already emerged as location of choice by various players.” said Karan Singh Sodi, Regional Managing Director – Mumbai, JLL India,” said Karan Singh Sodi, Regional Managing Director – Mumbai, JLL India.

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.

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.

Investors (re)imagining India data center market as

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.