Server room for data storage. (Representative image)
Credit: iStock Photo
Bengaluru: Beating the likes of Australia, Hong Kong, Japan, Singapore and South Korea, India emerged as the country with the largest operational data centre capacity, of around 950 megawatts (MW) in the January-March 2024 quarter, as per a new report released by property consultancy CBRE on Wednesday.
The country is likely to maintain this lead with a capacity addition of approximately 850 MW between 2024-26, higher than major peers in the region, the report added.
The total collective capacity of operational and non-operational data centres, which stood at approximately 1,030 MW by the end of 2023, is likely to increase 30 per cent year-on-year to reach approximately 1,370 MW in the ongoing calendar year, per the report.
“Sustained demand is expected from banking, financial services and insurance firms, technology corporates and cloud service providers as they explore alternative solutions such as colocation and hyperscale facilities,” said Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE.
Magazine said that engineering and manufacturing firms, along with technology companies, are likely to establish their own data centres, specifically dedicated to research and development labs.
India’s financial capital, Mumbai remains the dominant market within the segment, accounting for over 50 per cent share as of 2023. Reliable power supply, broadband connectivity and availability of skilled manpower add to the city’s appeal as a sought-after destination, the report noted.
Chennai, with an 18 per cent share, follows as the second most popular market owing to its strategic location on the east coast, facilitating strong connectivity to East Asia. According to the report, more than 60 per cent of the upcoming supply would be concentrated in Mumbai and Chennai, while Delhi-NCR, Bangalore and Hyderabad are expected to jointly account for over 30 per cent share.
High cost of land and lengthy approval timelines remain the prominent challenges for this flourishing segment.
Grade A office leasing demand to cross 70 msf in 2024: Report
Demand for Grade A office space leasing is expected to breach the 70 million square feet (msf) milestone in 2024, according to a report released by real estate developers’ body CREDAI in collaboration with CRE Matrix on Wednesday.
The metric registered a 12 per cent sequential and 14 per cent annual rise at 16.7 msf in the first quarter of the calendar year, the report stated.
Bengaluru, the Mumbai Metropolitan Region and the National Capital Region were the primary drivers of this growth in demand, accounting for nearly two-thirds of the total office demand during the period.
“This forecast underscores not only the resilience of the commercial real estate sector but also the immense opportunities awaiting developers, corporates and investors,” said CREDAI president Boman Irani.
Market rentals across Grade A spaces continued to increase, nearing Rs 100 per square feet, with an 8.7 per cent quarter-on-quarter increase in the January-March period, the report cited.
During the first quarter of the 2024 calendar year, 56 per cent of the demand stemmed from occupiers leasing more than 1 lakh square feet, marking a significant increase from 36 per cent in the fourth quarter of 2023 and 33 per cent in the first quarter of 2023.
Bengaluru, Hyderabad and Noida collectively accounted for 66 per cent of these large deals exceeding 1 lakh square feet.
Sectorally, the IT/ITeS category emerged as the dominant force in leasing demand, accounting for approximately 28 per cent of office space requirements. This came on the back of a strengthening return-to-office policy, the report stated.