Policy initiatives, Covid-19 push to double data centre capacity in India by 2025: CBRE

Policy initiatives, Covid-19 push to double data centre capacity in India by 2025: CBRE
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28 May, 2020

Data centre capacity in India is set to double in the next five years from the current 500-520 MW, according to real estate consulting firm CBRE.

Markets across Mumbai, Chennai, Bengaluru, Kolkata, Hyderabad, Pune and NCR are expected to witness supply addition of upto 40% in 2020, the firm said in a report on Wednesday.

With 41% data capacity, Mumbai is currently in the lead, followed by Bengaluru at 17% and Delhi at 16%, it said.

Read: NPCI to build a data centre in Chennai

With growing digital consumption patterns, such as online gaming, online education, streaming, and ecommerce, the demand for data centre space is set to increase, the report said.

“In the era of the fourth industrial revolution, we expect regulatory support to augment the data centre demand in India. Policy impetus such as the National Ecommerce Policy, Personal Data Protection Bill, proposed policy on data centre parks and digital initiatives by the government will accelerate demand,” Anshuman Magazine, chairman and CEO for India, Southeast Asia, Middle East and Africa at CBRE, said.

The Covid-19 situation will further propel the next wave of growth in the sector, Magazine said. 

As the pandemic has pushed companies to allow employees to work from home, digital transformation has taken the spotlight, with firms focusing their investments on cloud and hybrid IT infrastructure, the report added.

Read: Coronavirus India LIVE updates

As the demand for data centres increases in India, global players are likely to fund companies in the country to get a piece of the pie, thus increasing the inflow of capital into the segment, the report said. The proposal to give data centres “infrastructure status” will also help attract investor attention, Magazine added. 

“Demand for outsourced data centre solutions has increased in India and we understand that occupiers would require flexible, scalable solutions that are both operationally and financially optimal. Technology and automation would provide significant opportunities in terms of how data centre operations evolve as we move forward in the next 3-5 years,” Ram Chandnani, managing director of advisory and transaction services at CBRE South Asia, said.

Separately, Kolkata, Pune, Gurugram, Kochi and Jaipur are likely to be the first cities to witness edge computing as part of their data centre portfolios, the report added.