Hyderabad an emerging hotspot in data centre space: JLL

Hyderabad: Hyderabad is emerging as a hotspot in the data centre space, driven by industry-friendly policy incentives, reliable power supply and economical set up costs. The city’s inventory is set to grow three times by 2023, with 66 MW capacity addition.

The city with current data centre capacity of 30 MW across five colocation assets is serving the needs of multiple industries, dominant being technology, entertainment & media, and energy sectors, according to JLL report titled ‘2020 India Data Center Market Update’.

Of the 66 MW capacity addition to happen by 2023, about eight megawatt capacity is expected to be added in 2021, followed by 29 MW capacity each in 2022 and 2023.

While the presence of the IT, ITeS, pharmaceuticals and cloud solutions companies are acting as a demand driver, the city is witnessing large ticket investments with Amazon Web Services investing $2.77 billion in a core facility and NPCI investing $70 million in an own tier-IV data centre in Hyderabad.

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India’s data centre sector will require investment of $3.7 billion over the next three years in order to fulfil the 6 million sq ft greenfield development opportunity for the industry. The industry is expected to add 560 MW during 2021-23.

“India’s colocation data centre industry witnessed unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America. Colocation capacity grew by around 28 per cent to reach 447 MW in 2020 from 350 MW in 2019,” said Rachit Mohan, head, Data Center 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 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.

Mumbai and Chennai are expected to drive 73 per cent of the sector’s total capacity addition during 2021-23, while other cities such as Hyderabad and Delhi NCR are emerging as new hotspots, JLL noted.

Robust expansion 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.

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