Real estate demand for data centres to increase by 15-18 mn sq ft by 2025: Savills India
May 26, 2021
Mumbai (Maharashtra) [India], May 26 : Real estate demand for data centres is set to see an upward momentum by 15 to18 million square feet in the next four to five years across major Indian cities, according to Savills India's latest report released on Wednesday.
The report estimates that power demand by data centres in the country between 2021-25 is expected to touch over 2,500 megawatt with the adoption of 5G, Internet of Things (IoT), artificial intelligence (AI), increasing use of cloud services and in smart cities.
Data centres have been one of the real estate asset classes that is least affected due to Covid-19 related crisis across the globe including in India, indicating their crucial role in supporting continued business activity. The Indian data centre market is likely to exhibit higher growth rate than the world average, the report said.
Data centres in India currently occupy over 7.5 million sq ft area consuming over 650 MW power while more than 8 million sq ft and 870 MW capacity are under-construction. With proposed development of over 10 million sq ft for 1,200 MW, the country is on its path of achieve 3,000 MW data centre capacity in near future.
Given India's rich network connectivity, cost advantage, availability of skilled labour, low climate risk and strong data protection laws, India is well positioned to serve as a regional data centre hub in Asia Pacific and is likely to attract significant investments, the property consultancy said in the report.
As of February, India had 123 data centres compared with 2,653 in the United States, 451 in the United Kingdom, 442 in Germany and 199 in Japan.
Niraj Karale, Director and Head for data centre services division at Savills India, said the government's proposed policy is likely to augment investment in the sector, boost digital economy and improve the country's required infrastructure to cater to the growing digital consumption.
"Data localisation laws, increasing adoption of cloud technology and ever-increasing use of e-commerce, digital transactions and social media will result in increased demand of data, thereby pushing the need for data centre and cloud services," he said.
At present, the data centre industry is buoyant in cities such as Mumbai, Chennai, Delhi NCR, Bengaluru and Hyderabad. Kolkata and Pune are some of the key upcoming cities.
Savills anticipates tier 2 cities like Ahmedabad, Bhubaneshwar, Coimbatore, Jaipur, Kochi, Lucknow, Nagpur and Vizag to see investments towards edge data centres.
