India's data centre market sees investment commitments of USD 21.4 billion in Jan-Jun 2023: CBRE

Indian data centre market has witnessed investment commitments worth USD 21.4 billion during the first six months of this year, showing the high interest of investors in this growing sector, according to CBRE. Real estate consultant CBRE has released a report 'From Bytes to Business: India Data Centre Market Powering Progress in 2023'.

"The Indian DC industry is witnessing a continuous uptrend owing to rapid digitalisation, improving tech infrastructure, and inclusion of advanced technologies such as 5G, Artificial Intelligence (AI), blockchain and cloud computing," the report highlighted.

The country's growing digital infrastructure, increasing technology penetration and proactive regulatory push have made it an attractive destination for DC (data centre) investments, it added.

CBRE report mentioned that India's DC capacity doubled between 2020 and 2023 to reach around 880 MW as of H1 2023 and is expected to touch about 1,048 MW by the end of 2023.

"Investor interest in this sector has remained elevated, despite the recent global macro-economic headwinds. During H1 2023, the sector witnessed investment commitments worth USD 21 billion.

"Overall, between 2018-H1 2023, the DC market in India attracted investment commitments of about USD 35 billion by both global and domestic investors," CBRE said.

Hyperscale DCs dominated the majority of these investments with a share of about 89 per cent, while co-location DCs contributed to the rest 11 per cent.

The top states that dominated the cumulative investment commitments include Maharashtra, Tamil Nadu, West Bengal and Uttar Pradesh.

"Increasing population, enhanced use of technology, social media, and online streaming platforms, rising need for data localisation and fast improving digital infrastructure would continue to boost demand for data centres in India," Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said.

This, in turn, is likely to result in the country becoming one of the largest DC destinations across APAC over the next decade, he added.

Multiple state governments have been giving an enormous push to the DC segment in the country, with dedicated policies/incentives introduced to attract both global and domestic investors. "Most of the states have also declared DCs under 'essential services' to ensure uninterrupted operations throughout the year," he said.

Amit Sarin, Managing Director of realty firm of Anant Raj which is into data centre development, said the overall demand for data centres is on the rise.

"In addition to the growing demand for hyperscale facilities, there is also a strengthening demand for co-location services," he said.

Data Protection legislation, and the classification of data centres as infrastructure assets are instrumental in transforming the country into a global data hub, Sarin said.