Data Centre capacity in Hyderabad to go up 3x by 2023

Hyderabad: HYDERABAD is emerging as the upcoming data centre hub backed by favourable State data centre policy acting as a catalyst. The city is expected to add 66 MW during 2021-23 as per a JLL report titled '2020 India Data Centre Market Update.'

"Hyderabad is emerging as the new data centre hotspot owing to regulatory incentives, competitive construction costs and a large user market. The city which currently accounts for 7 per cent share of colocation data centre capacity is expected to reach 10 per cent share by 2023.

The growth potential of the city is backed by an upcoming greenfield data centre campus being set-up by one of the leading global cloud players in Hyderabad," said Sandip Patnaik, MD & Head Telangana and Andhra Pradesh, JLL.

"India's colocation data centre industry witnessed unprecedented absorption of 102 MW vduring 2020, notching higher absorption than most key markets of Europe and America. Fuelled by longer-term trends of rising cloud adoption, increasing digitalisation and progressive legislation, we anticipate increased demand for colocation space nationwide.

Rising demand led data centre operators and developers to pursue ambitious expansion plans, while some adopted the acquisition route to enter Indian markets, which we expect to continue. Colocation capacity grew by around 28 per cent to reach 447 MW in 2020 from 350 MW in 2019," said Rachit Mohan, Head- Data Centre Advisory (India), JLL.

As the data centre 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, IoT-linked devices, data localisation and cloud adoption.

India's data centre sector will require an investment of $3.7 billion over the next three years to fulfil the 6 million sq. ft greenfield development opportunity for the industry.

Mumbai and Chennai are expected to drive 73 per cent 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 continues owing to prevailing infrastructure, while new markets like Hyderabad are gaining momentum in this space.

"India's data centre 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.

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 Government to turn India into a 'Global Data Hub' has provided necessary measures to achieve this goal," said Dr. Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.