New Launch - India Real Estate Report 2026.
India's data centre industry is heading toward a fundamental transformation.
Capacity is projected to surge from 1.6 GW as of June 2026 to 6 GW by 2029, according to a JLL India report. That makes India Asia's fastest-growing digital infrastructure market.
The expansion will require USD 110 billion in capital investment and will be driven by AI workloads and hyperscale cloud deployments, with Mumbai and Hyderabad capturing the majority of new supply.
H1 2026: Already Outpacing the Trend
The sector is already running ahead of its own historical pace. In H1 2026, the market recorded 101 MW of absorption more than 20% above the three-year H1 average.
Supply remained robust, with 85 MW delivered during the period, primarily in Mumbai and Chennai. Accelerated pre-committed deliveries have pushed vacancy to a record low of 2.8%.
Where the 4.4 GW Pipeline Goes
The 4.4 GW supply pipeline through 2029 is distributed strategically across key markets:
- Mumbai: 35% share, predominantly colocation
- Hyderabad: 24%, mixed self-build and colocation
- Visakhapatnam: 14%
- Chennai: 9%
The capital breakdown behind this expansion is equally significant:
- Real estate construction: USD 4 billion
- Mechanical, electrical and plumbing infrastructure: USD 18 billion
- IT equipment including servers and racks: USD 88 billion
Also Read: Anant Raj to Demerge Data Centre Business as Ashok Cloud
Hyperscalers Are Building Their Own
Global hyperscalers are no longer simply leasing capacity. They are building it. By 2029, hyperscale self-build facilities are expected to deliver 1.4 GW nearly 30% of all new capacity.
Major investments are transforming Hyderabad and Visakhapatnam into gigawatt-scale hubs alongside established markets. This is a structural shift in how digital infrastructure gets developed in India.
Landlords and colocation operators are no longer the only capital entering the sector.
Tax Policy Is Accelerating the Investment
The India Union Budget 2026–27 introduced a 20-year tax holiday for foreign cloud service providers, extending until 31 March 2047.
The policy has attracted over USD 50 billion in foreign capital commitments and has dramatically accelerated investment timelines.
It positions India as a global routing hub for AI and cloud services while de-risking long-term capital deployment for international operators who previously faced policy uncertainty over multi-decade infrastructure bets.
Also Read: India's Data Centre Boom Is Now a Real Estate Story Too
What the Numbers Mean for Real Estate
Rachit Mohan, Managing Director, Data Centre Leasing, APAC at JLL, said India is witnessing the creation of an entirely new digital infrastructure ecosystem that will reshape the country's technology landscape and drive economic growth for decades.
For real estate, the implications are already visible. Land acquisition around Mumbai, Hyderabad and Chennai is accelerating.
Power access and water infrastructure are becoming as important as location.
At USD 4 billion in real estate construction alone, the sector's demand for industrial-grade sites, high-power-density buildings and proximity to fibre and grid infrastructure is creating a new category of commercial real estate investment in India one that sits alongside, and increasingly competes with, conventional logistics and office assets for the same land.
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