About 9.3 mn sq ft of real estate space to be developed for data center industry by 2025: JLL India

An additional 9.3 million sq ft of real estate space is expected to be developed by 2025 for the rapidly growing data center industry at an investment of USD 1.03 billion (about Rs 7,700 crore), JLL India said on Wednesday. “Indian data center industry’s capacity is expected to grow to 1,078 MW by 2025 from 375 MW in H1 2020…,” the real estate consultant said in a report. MW indicates IT power load. Mumbai is expected to witness the highest capacity addition of around 360 MW, followed by Chennai with a capacity addition of 134 MW.

Total capacity addition of 703 MW by 2025 is expected to add 9.3 million sq ft of real estate space. “Potential real estate development of 9.3 millon sq ft worth USD 1.03 billion by 2025…Construction and development of data center space in India to need a total investment of USD 1.03 billion,” the report said. JLL India estimated that data center industry would present a total of USD 4.9 billion (about Rs 36,700 crore) greenfield investment opportunity for real estate developers and investors during the next five-and-a-half years.

As the data center industry is closely linked with telecom sector dynamics, JLL said the recent announcements by Reliance industries in areas of digital connectivity, 5G services and strategic partnership for cloud services are going to influence the growth in this segment. “As the world’s second largest data subscriber population increasingly adapts to a new digital world, India’s data center industry is expected to travel through an interesting transition phase in terms of operators, locations and technology,” the report said.

India’s data center 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 per cent rise in daily data consumption was observed during the lockdown,” it said. There was a 12 per cent rise in data consumption in Andhra Pradesh and Bihar, while there was a 7 per cent increase in data consumption in Maharashtra.

In terms of total additional supply, there has been an increase of 8 per cent in H1 2020, taking India’s total co-location capacity to 375 MW. The first half of 2020 also witnessed supply addition of 27 MW, 56 per cent of the total addition seen in 2019 (48 MW). “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,” said Ramesh Nair, CEO & Country Head, India, JLL.