India’s data centre industry to cross 1.3 GW capacity by 2024

V Nagarajan

India’s capacity expansion by existing and new players in the data centre (DC) industry is expected to result in an additional capacity of 804 Megawatt (MW) during 2022-2024, translating to 34 per cent ompound annual growth rate (CAGR) for the period, according to JLL’s report India’s Data Centre report card 2021.

The country’s data centre industry to cross 1.3 Gigawatt (GW) capacity by 2024.

A notable feature of this supply growth has been that a large share of it has been pre-committed by hyper scale and is expected to become operational in the next three years.Mumbai and Chennai are expected to witness higher growth owing to their infrastructure advantages.

As a result, both cities will account for 68 per cent of the total capacity in 2024.The addition of a new cable landing that would connect these cities, going forward, would also lead to higher bandwidth.

However, landlocked locations like NCR-Delhi would also see growth in capacity addition due to government-led digital initiatives and data demand.

Proactive state policies, meanwhile, are creating Hyderabad into an emerging location for hyper scale cloud players.

The Indian data centre industry is expected to add 804 to Megawatt capacity from 2022-to 2024.This would mean the creation of 9.7 million sq ft of real estate space for this new capacity across India’s leading cities.

“Owing to its high share of capacity addition, Mumbai is expected to create demand for 6.18 million sq ft, going forward.”

“The comparatively high land cost of the city vis-à-vis other DC hubs will lead to a higher outlay of $3.3 billion for setting up data centres in the city.”

As Chennai has similar advantages, it would follow with 2.03 million square feet (sq ft) of real estate space addition at an investment of $1 billion,” said Rachit Mohan, Head, Data Centre Advisory, India, JLL.

The strong demand growth has been matched by a supply addition of 119 Megawatt (MW) during the year, registering a growth of 23 per cent over 2020.

Mumbai, Pune, and Chennai together accounted for 83 per cnt of the total supply during 2021.

Data Centre operators have been following a land banking strategy to provide scalable and seamless options for hyper scale cloud players. The demand momentum for the data centres (DC) that picked up during 2020 has gained pace, with an estimated absorption of 116 MW during 2021—a 14 per cent year on year (YoY).

“Demand picked up in the second half of 2021 in India’s key markets, including Mumbai. In fact, the total absorption in the second half of the year increased by 49 per cent over the first half.

In Mumbai alone, demand increased by a strong 71 per cent in the second half of 2021, reaching 62 Megawatt (MW) for the year,” Dr Samantak Das, Chief Economist and Head of Research & REIS at JLL India.

“This high growth is currently being matched by ambitious growth plans of colocation DC operators, leading to a capacity addition of 119 MW during the year.

The untapped potential from other sectors like agriculture, logistics, finance and automotive also promises a high growth trajectory for data usage in the years ahead,” he added.I have invested in commercial property in Bengaluru and planning to mortgage the unit to raise short-term funds.

Does it require approval from the authorities? Are there restrictions while mortgaging it to the banks or other lending institutions? Please clarify. Pradeep, Sharjah. You can mortgage the commercial property to an authorised dealer/housing finance institution in India without the need to get any approval from the authorities. You can also mortgage to a party abroad but with prior approval of Reserve Bank of India.

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