Data centers are emerging as a vital segment within India’s commercial real estate landscape, buoyed by digital transformation, cloud adoption, and growing internet usage:
- New Demand Driver: Traditional commercial spaces primarily catered to offices, but the rise of AI, IoT, and 5G has multiplied data storage and processing needs. Hyperscale and co-location facilities demand dedicated land, robust power setups, and large floor areas.
- Market Size & Growth: By 2023, India’s live data center capacity reached ~854 MW across around 13 million sq. ft. Major hubs like Mumbai, Chennai, and Bengaluru account for over 80% of this inventory, attracting both domestic and global operators.
- Infrastructure Requirements: Data centers need redundant power, cooling systems, and fiber connectivity, often pushing developers to build advanced industrial-grade parks. This shift expands the scope of commercial real estate from merely offices to tech-driven facilities.
- Regulatory Tailwinds: Policies like data localization and proposed Data Protection Acts underscore the need for secure, on-shore servers, further propelling data center expansions.
Hence, data centers offer higher rental yields and longer lease terms, making them an attractive addition to India’s commercial real estate portfolio.