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Chennai, Hyderabad to log 4x rise in data centre development by 2022

Chennai, Hyderabad to log 4x rise in data centre development by 2022

The Southern cities of Chennai and Hyderabad are expected to witness over four-fold increases in the data centre development by 2022, a JLL report said. The study says that the demand momentum, which gathered pace in 2020, continues.

“The Indian data center industry witnessed 46.4 MW absorption during H1 2021 — equivalent to 90% of supply addition during the period (H1 2021),” said Rachit Mohan, Head, Data Center Advisory — India. The two cities are currently behind Mumbai, which has emerged as the preferred data centre location.

Mumbai is expected to see the highest capacity addition as it continues to be the preferred choice for large cloud players due to availability of infrastructure, presence of submarine cable landing stations and low development cost.

Nationwide, the acceleration of digitalisation has forced enterprises to scale up their IT infrastructure. As a result of digital upgrades, a strong demand for colocation/cloud facilities, which offer scalability, security, and connectivity at lower costs, is being witnessed across India. Investors and global data center players have increased their commitment during the last six months in the India market by announcing joint ventures to meet the expected demand.

Both Chennai and Hyderabad have seen large investments from data centre operators and investors like CapitaLand, Brookfield, Weber’s, Flipkart, National Payments Corporation of India, Oracle and Hiranandani are looking to tap the growing market in the country. “Chennai is a key market with robust economy, port centric business and well-established automobile-engineering -manufacturing hubs. The ease of doing business climate is augmented with the phenomenal infrastructure and submarine cable connectivity which is imperative for data centres,” said Darshan Hiranandani, chairman, Yotta Infrastructure.

Industry expects that 2500MW of new data centre capacity will be needed by 2026 in India.

Ascendas India Trust is also looking to expand its data centre business in Hyderabad and Chennai.
“India is still a very early stage data center market, we will compare from a capacity availability standpoint in India data centers are a small fraction of what you have even in a place like Singapore or Tokyo, Hong Kong but that’s also the reason why the growth in India for data centers is very strong, ” said Sanjeev Dasgupta, Chief Executive Officer of the Trustee-Manager of Ascendas India Trust.

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