Top 8 Indian cities are expected to add around 10 million sq ft data center space in the next 2-3 years aided by data localization norms and the massive digital push initiated by the Covid-19 pandemic, said an ANAROCK Property Consultants report.
Currently, data centres in India’s top 8 cities occupy 7.5 million sq ft space. The key cities leading demand for data centres include Mumbai, Chennai, Bengaluru and Hyderabad, among others. The demand resulted post the pandemic is expected to be lucrative for this segment fetching annual rental yield of 10-14%.
“The pandemic has been a massive catalyst for digital adoption across the spectrum. Work-from-home (WFH) compulsions, online education, video-based medical consultations, a huge increase in ecommerce and business-related video conferencing and webinars are increasing the demand for data centres,” said Shobhit Agarwal, MD & CEO, ANAROCK Capital.
Leading corporate entities like Adani Group, Hiranandani Group and Salarpuria Sattva have already rolled out significant investment plans for building data centres in India over the next decade and more.
As per industry estimates, the data centre outsourcing market in India is worth more than $2 billion and is projected to grow at 25% CAGR to reach $5 billion by FY2023-24. In fact, data centres are emerging as an alternative real estate asset class with huge potential, and leading real estate developers are zeroing in on this opportunity to reap superior returns from early investments.