Shobhit Agarwal, MD-CEO, Anarock Capital says, “Currently, data centres in the top 8 cities occupy 7.5 mn sqft space and an additional 10 mn sqft space is likely to be added over the next 2-3 years. Soon after India went into a lockdown mode due to COVID-19, there was a 25-35% increase in data centre capacity usage as companies began to overhaul their digital infrastructure to deal with the new work environment.” 

“The pandemic has been a massive catalyst for digital adoption across the spectrum,” says Agarwal. “Work-fromhome (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. Furthermore, the government’s move to make data localisation mandatory ensures a promising future for data centres in the country.” 

As per industry estimates, the data centre outsourcing market in India is worth over $2 bn and is projected to grow at 25% CAGR to reach $5 bn by FY 2023-24. 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. Leading players include Adani, Hiranandani.