Data centre sector requires $3.7 bn to develop 6 mn sq ft space: JLL

An investment of $3.7 billion (about Rs 27,000 crore) will be required over the next three years to develop six million sq ft space for the data centre sector, according to a report by JLL India

An investment of USD 3.7 billion (about Rs 27,000 crore) will be required over the next three years to develop six million sq ft space for the data centre sector, according to a report by JLL India.

The Indian data centre industry is expected to add 560 MW capacity during the 2021-23 period, the property consultant said.

"India's data centre sector will require an investment of USD 3.7 billion over the next three years in order to fulfil the 6 million sq ft greenfield development opportunity for the industry," JLL India said in a statement.

The data centre industry is expected to grow exponentially to reach 1,007 MW by 2023 from its existing capacity of 447 MW.

India's colocation data centre industry witnessed the unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America," said Rachit Mohan, Head, Data Center Advisory (India), JLL.

Mohan expects increased demand for colocation space, driven by rising cloud adoption, increasing digitalisation and progressive legislation.

"Rising demand led data centre operators and developers to pursue ambitious expansion plans, while some adopted the acquisition route to enter Indian markets, which we expect to continue," he said.

Colocation capacity grew by around 28 per cent to reach 447 MW in 2020 from 350 MW in 2019.

The consultant said the demand is likely to ramp up further due to the imminent 5G rollout, IoT-linked devices, data localisation and cloud adoption.

Mumbai and Chennai are expected to drive 73 per cent of the sector's total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR emerging as new hotspots, JLL said.