India added 71 megawatt IT data center during Jan-Jun, demand projected to be strong: Savills

Pushed by demand from hyperscalers, BFSI (Banking, Financial Services, and Insurance), IT, and other service sectors, approximately 71 MW of IT data center capacity was added across key markets in India during the first half of 2024, as per findings of Savills India, a global real estate advisory firm.

The sectors that opted for more capacity, all rely heavily on data centers for colocation and related services.

A data center is typically a large group of networked servers used by organizations for the remote storage or distribution of large amounts of data. Data localization plans are expected to trigger investments in data centers, besides incentives by various states to attract such investments.

According to Savills, the period marked a significant growth, with total stock increasing by 21 per cent year-on-year from 778 MW in first half of 2023 to 942 MW in 2024. Concurrently, the market witnessed transactions totaling around 200 MW in capacity during this period.

As of June 2024, the operational IT capacity stood at approximately 942 MW, reflecting a compounded annual growth rate (CAGR) of 22 per cent since 2014, when it was 158 MW.

Mumbai led the way with a substantial 54.9 per cent share of the total capacity, followed by Chennai (12.3 per cent), Bengaluru (8.2 per cent), and Pune (7.2 per cent), the real estate advisory firm said.

While major absorption has been recorded in hyperscalers across major cities, colocation services followed closely witnessing significant growth. This shift, as per Savills, can be attributed to factors such as high capital expenditure and operating expense.

Savills is a global property advisory firm headquartered in London having offices across US, Europe, Asia Pacific, Africa and the Middle East. Savills India is a group company of Savills Plc, with offices in Bengaluru, Mumbai, Delhi NCR, Chennai, Pune, Hyderabad, Ahmedabad and Kolkata.

“We project a strong demand for data center capacity in India by the end of 2024, with an estimated requirement of 400 MW across major cities. While supply is expected to reach 350 MW during the same period, data centre operators are expanding their service offerings beyond colocation to include networking, cloud solutions, specialized hardware like GPUs (graphics processing unit), and other managed services,” said Srihari Srinivasan, Director and Lead Data Centre Services, Savills India.

“This growth is being driven by surging internet usage, the rise of 5G and the need for ultra-low latency for mobiles, which is also creating a growing demand for edge data centers in specific areas. Furthermore, increasing adoption of AI and IoT across various industries is fueling the need for data center services, with GPU-powered solutions playing a key role in addressing these demands,” said Srihari Srinivasan.
India, which is the world’s highest populated country, generates an estimated 20 per cent of the world’s data.