Mumbai is expected to add 330 MW in the next two years and Navi Mumbai is expected to account for 83% of these data centre additions
With a 199 MW IT load, Mumbai is the leading data center hub of the country with nine internet cable landing and an assured power supply
MUMBAI: Data center capacity in the country's financial capital, Mumbai, is likely to grow 2.65 times to 529 megawatt (MW) by 2023, according to a report by global real estate services firm JLL's India arm.
The city is expected to add 330 MW in the next two years and Navi Mumbai is expected to account for 83% of these additions in the Mumbai region.
With a 199 MW IT load, Mumbai is the leading data center hub of the country with nine internet cable landing and an assured power supply.
“Mumbai is the most preferred destination for cloud players with a 60% share of the occupied space due to its excellent infrastructure support. The state has provided various incentives for setting integrated data center parks," said Karan Singh Sodi, regional managing director-Mumbai, JLL India, adding that the new supply additions in the city are backed by pre-commitment from cloud players. The city’s strong demand is driven by BFSI, media, and IT/ITes companies leading to high occupancy levels of 95%."
India’s colocation data center industry witnessed unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America.
Fueled by longer-term trends of rising cloud adoption, increasing digitalization, and progressive legislation, we anticipate increased demand for colocation space nationwide. Rising demand led data center operators and developers to pursue ambitious expansion plans, while some adopted the acquisition route to enter Indian markets, which we expect to continue. Colo capacity grew by around 28% to reach 447 MW in 2020 from 350 MW in 2019" said Rachit Mohan, head, Data Center Advisory (India), JLL.
As the data center landscape continues to evolve, the industry is expected to grow exponentially to reach 1,007 MW by 2023 from its existing capacity of 447 MW. With the growing reliance on digital connectivity, demand is likely to ramp up further due to the imminent rollout of 5G rollout, Internet of Things-linked devices, data localization, and cloud adoption.
India’s data center sector will require an investment of $3.7 billion over the next three years to fulfill the 6 million sq. ft greenfield development opportunity for the industry.
Mumbai and Chennai are expected to drive 73% of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR emerging as new hotspots. Robust pre-commitments by global cloud players in the established markets of Mumbai and Pune continue owing to prevailing infrastructure, while new markets like Hyderabad are gaining momentum in this space.
“India’s data center industry is expected to add 560 MW during 2021-23 leading to a real estate requirement of 6 mn sq. ft. The supply addition will be complemented by densification of racks and servers, sustainable energy sourcing and use of indigenous resources," Dr. Samantak Das, chief economist and head of research & REIS (India), JLL, adding that rising demand is leading operators to pursue ambitious expansion plans, while some are adopting the acquisition route to enter Indian markets.
"Various policies and reforms brought in by the fovernment to turn India into a ‘Global Data Hub’ have provided necessary measures to achieve this goal," he said.
The increasing usage of e-commerce, EdTech, and digital transactions placed the existing IT infrastructure of enterprises under pressure. Overall data usage increased by 36% in 2020 due to increased usage of smartphones and fixed wireless access, according to the Nokia Mobile Broadband India Traffic Index 2021.
Enterprises have been upgrading their IT infrastructure by adopting hybrid models, given their budget constraints. Technology trends like 5G rollout, IoT-linked devices, and artificial intelligence AI will also result in stronger growth in demand.
According to JLL, the rapid growth of the data center industry has led to increased energy consumption and environmental impact. Increasingly, global cloud players setting up bases in India aim to reduce their carbon footprint and are looking at data centers that provide sustainable energy alternatives and are entering renewable energy power contracts.
India’s renewable energy capacity at 90 gigawatts (GW) accounts for a 25% share of the installed power capacity and provides tremendous scope for the development of green data centers.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!