The rate at which India is shifting towards digitalisation, and the need to store, process and use the data generated through this, has made creation of additional data centre capacity exigent. A data centre is a physical facility composed of networked computers, storage systems and computing infrastructure used by organisations to store, assemble, process and distribute large amounts of data.   

A JLL report finds that in 2021 the total capacity of data centres in India was 565 MW which is projected to double in 2023 to reach 1203 MW and exceed 1300 MW by 2024. Current data centres are predominantly in the West, with Mumbai accounting for 45 per cent of the capacity. Pune follows with 14 of current capacity with Bengaluru next in the list with 12 per cent capacity in 2021.  

Chennai could rank second by 2024

However, Chennai is expected to increase its capacity in data centres by 2024 to reach the second spot with 16 per cent of the capacity. Mumbai is projected to retain the pole position, increasing its share to 50 per cent by 2024.   

Cloud, technology and telecom companies are the top players who had the highest share in India’s data centre capacity in 2021. Now, big tech giants such as Microsoft, Amazon web services and Google are investing to establish data centres across the country. Indian companies like Reliance, too, have multiple data centres and have partnered with Microsoft and Jio to build more across the country. Adani and NPCI too have invested in building their own data centres in cities like Hyderabad, Chennai and Visakhapatnam.  

The total investments for data centre capacity additions is expected to be $5.5 billion by 2024. Mumbai and Chennai are expected to garner a lion’s share $4.3 billion combined, accounting for 78% of the total investments

Realty firms to benefit

Real estate companies are expected to benefit from the growth in data centres with total demand of 9.75 million square feet in India by 2024. Most of the demand will be in Mumbai at 6.18 million square feet followed by Chennai with a demand of 2.03 million square feet. 

Demand for these data centres is expected to grow aggressively as data protection laws, data localisation and governments push for digital adoption along with the roll out of 5G services have created additional demand for these services. The ever-growing internet user base in India, and stellar growth in data consumption justifies the investments pouring into these centres.