India has surpassed several prominent nations such as Australia, Hong Kong SAR, Japan, Singapore, and Korea to claim the title of having the highest data center capacity in the Asia-Pacific region (excluding China), boasting 950MW.

According to CBRE, the country is poised to witness the most significant capacity addition, with an anticipated 850MW increase during the 2024-2026 period, surpassing major APAC countries.

Significant investments from global operators, real estate developers, and private equity funds have been witnessed in the sector.

Henry Chin, global head of investor thought leadership and head of research at CBRE APAC, stated, "In India, 2023 experienced a quiet year for leasing as many companies adopted a wait-and-see approach amid the global economic slowdown. However, activity began to pick up strongly in Q4 2023, and there is a large volume of deals in the pipeline."

Following India, Japan recorded the second-highest data centre (DC) capacity with 892 MW, followed by Australia at 773 MW, Singapore at 718 MW, Hong Kong at 613 MW, and Korea at 531 MW.

In 2023, there was an addition of 255 MW of new supply compared to 200 MW in 2022, resulting in a total stock of approximately 1,030 MW by the end of the year. This accelerated growth is expected to continue in 2024, with a planned supply of over 330 MW across various cities, potentially increasing the stock by 30% annually to reach around 1,370 MW. The total DC stock in India in 2023 was 16 million square feet.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa at CBRE, remarked, "India, with its favourable market conditions, is attracting multinational corporations (MNCs) seeking to expand their digital services and relocate from other Asian markets due to supply constraints. Sustained demand is expected from BFSI firms, technology corporates, and cloud service providers as they explore alternative solutions such as colocation and hyperscale facilities."

Data centres (DC) remain among the top three preferred alternative assets for investors in the APAC region, including India.

Global investors maintain a strong interest in the Indian data center market, with many groups considering partnerships and joint ventures with local operators. M&A activity among operators is likely to increase in the coming years due to the growing number of players, which should result in some consolidation before the market becomes too fragmented.

Amit Sarin, Managing Director of Anant Raj Limited, announced plans to invest over Rs 10,000 crore to develop a 307-megawatt data center across three locations - Manesar, Rai, and Panchkula. The company aims to establish a campus with a capacity of 157 MW initially, with the remaining capacity to be developed as greenfield projects. The initial phase is already operational, with the next phase set to become operational soon.

Between 2018 and 2023, India secured investment commitments exceeding USD 40 billion from both global and domestic investors.

The top states that dominated the cumulative investment commitments include Maharashtra, Uttar Pradesh, West Bengal, and Tamil Nadu. India is also attracting global hyperscalers who consider it a prime market for expansion, with many opting for their customised build-to-suit (BTS) facilities.

In 2023, more than 85% of the committed USD 27 billion is earmarked for the development of hyperscale facilities.

Image source: The Economic Times