Data centers to attract USD 10 billion investments over next 3 years: CII-Colliers

Data centres are likely to attract investments of USD 10 billion in the next three years on rising demand for storage capacity with a sharp growth in internet access, according to CII-Colliers report. Industry body CII and real estate consultant Colliers India on Thursday released a report “India Data Centers: Entering Quantum Growth Phase” at a conference on Tech in Real Estate in Mumbai.

"India's data centre market has experienced remarkable growth post-pandemic, attracting about USD 7 billion of total investments since 2020," the report said.

Global data centre operators, real estate developers, and private equity funds have invested this amount.

As of August 2023, the data centre capacity across seven major cities -- Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru Hyderabad and Pune -- stands at 819 MW, spread across 11 million square feet area, the report said.

Colliers India has projected that the data centre stock is expected to cross 23 million square feet by 2026, catering for a total data centre capacity of around 1800 MW.

About half of the upcoming supply during 2023-26 will be located in Mumbai.

"Data centres are likely to attract investments over USD 10 billion, in the next three years driven by increased internet access, government driven by increased internet access, government digitalization initiatives, and the adoption of cloud computing, IoT, and 5G," the joint report estimated.

Investors are capitalising on the data centre revolution, fuelled by data localisation efforts as well. They are also looking at stable income and better yields, the consultant said.

The report highlighted that global institutional investors and developers have been partnering with data centre operators to entail operational expertise and market experience in data centre development.

"Global hyper scalers too are viewing India as a prime market for expansion and developing their own Built to Suit (BTS) data centre facilities specially customized as per their requirements," the report said.

Developers are pursuing “land banking” strategies, by acquiring land for future projects in markets where development sites are scarce.

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