Data Centre (DC) investments in India are expected to surpass $20 billion by 2025, finds the latest report by CBRE, a real estate consulting firm. In the last five years, the Indian DC market has seen investment announcements of approximately $14 billion.

Growing digitalisation, combined with strong government policy impetus, has resulted in a surge in demand for DCs in India, according to the report. Furthermore, OTT, online gaming, e-commerce, online schooling by edtech platforms, location-agnostic work, machine learning, 5G, and more, have also contributed to a multi-fold increase in data transmission and the need for high-spec servers.

“With businesses across sectors expanding their digital infrastructure, DCs are becoming increasingly important as a larger alternate real estate class. Tier-II and -III cities are also expected to see a rise in demand. As a result, we expect DC growth and continued interest from investors looking to capitalise on the attractiveness of DCs as an alternative real estate investment option,” said Anshuman Magazine, Chairman and CEO-India, South-East Asia, Middle East and Africa, CBRE.

City-wise growth

According to the report, Bengaluru ranked second in terms of pan-India DC stock after Mumbai, accounting for  approximately 18 per cent of the total. Bengaluru’s DC stock is driven by global and domestic corporate demand. Moreover, the State’s recently released DC Policy 2022–27 has resulted in a comprehensive outcome on the State’s innovation and technology roadmap, said the report.

In the first half of FY2022, the DC stock in India exceeded 9 million sq ft with more than 600 MW capacity in India, said the report. By 2024, DC capacity is expected to nearly double, with more than 400 MW currently under construction in Indian cities. Other cities with high investments include Mumbai, Chennai, and Delhi-NCR.