Chennai :

CBRE South Asia has released its report titled “Asia Pacific Data Center Trends Q1 2024”. According to the report, India leads the major Asia-Pacific countries with the largest data center capacity of around 950 MW in the Asia-Pacific region (excluding China), surpassing major countries such as Australia, Hong Kong, Japan, Singapore and Korea. In addition, India is likely to record the largest capacity addition of about 850 MW over the period 2024-2026, more than countries in the greater Asia-Pacific region.

After India, Japan recorded the second largest centralized capacity (DC). with 892 MW, followed by Australia with 773 MW, Singapore with 718 MW, Hong Kong with 613 MW, and Korea with 531 MW.

India's DC industry has witnessed remarkable growth and transformation, with capacity doubling since then. The beginning of the epidemic. In 2023, 255 MW of new supply was added compared to 200 MW in 2022, resulting in a total inventory of approximately 1,030 MW at the end of the year. This accelerated growth is expected to continue until 2024, with planned supplies of more than 330 MW in several cities, which could increase the stock by 30% annually to about 1,370 MW. DC's total inventory in 2023 is approximately 16 million. Filed in India.

DC continues to rank among the top three alternative assets preferred by investors in the Asia-Pacific region, including India. The sector has seen significant investments by global operators, property developers and private equity funds keen to tap into the country's booming market.

Global investors remain keenly interested in the Indian resort data market, with several groups considering partnerships and joint ventures with Local operators. M&A activity among operators is likely to pick up in the coming years due to the growing number of players, which would lead to some consolidation before the market becomes too fragmented.

Sector The data center industry in India, with its flexibility and ability to achieve attractive returns, has emerged as a model of opportunity for investors. The attractiveness of the sector is further enhanced by the fact that between 2018 and 2023, India received investment commitments of over $40 billion from domestic and global investors.

This significant inflow of capital underscores the sector's ability to generate high returns. yields. This is a factor that makes it the preferred choice among investors, as foreign investments play a dominant role.

The top states that dominated cumulative investment commitments include Maharashtra, Uttar Pradesh, West Bengal, and Tamil Nadu. India is also attracting global expanders who see it as a key expansion market, many of whom choose its dedicated facilities (BTS). In 2023, more than 85% of the nearly $27 billion pledged will go toward developing large-scale facilities.

Strong supply pipeline to the capital

< Mumbai, known for its prestige As a city it remains the financial capital and host of major terminals connecting India to the Middle East and Europe, the dominant market with over 50% share of India's total inventory as of 2023. Reliable power supply, broadband connectivity, and availability of qualified personnel. The workforce also contributes to Mumbai's appeal as a desirable destination. Chennai, with an 18% share, remains the second most popular market due to its strategic location on the East Coast, facilitating strong connectivity with East Asia.

In particular, more than 60% of the upcoming supply will be concentrated in Mumbai and Chennai, While Delhi NCR, Bengaluru and Hyderabad together are expected to account for more than 30% of the share. With the expected influx of supply, tenants are expected to carefully evaluate their options, select suitable DC providers and negotiate favorable terms in line with their specific requirements. Demand is likely to accelerate in The second half of 2024, paving the way for continued growth in this sector. Emerging markets such as Kochi, Jaipur, Ahmedabad, Lucknow, Patna and Visakhapatnam are witnessing growth, driven by their strategic locations and improved infrastructure, including better power supply along with upgraded fiber and cable connectivity.

Total Shared Distribution Data Center Capacity currently stands at 1 gigawatt, more than double what it was 18 months ago. New data center supplies are expected to reach 250 MW per year over the next five years. Key tenant categories expected to increase demand include cloud service providers, BFSI companies, retail, healthcare, entertainment, telecommunications and others.

Anshuman Magazine, Chairman & CEO - India, Southeast Asia, Middle East & Africa, CBRE said: “India, with its favorable market conditions, is attracting multinational companies looking to expand their digital services and move out of other Asian markets because Supply constraints There is expected to be sustained demand from BFSIs, technology companies and cloud service providers as they explore alternative solutions such as co-location and large-scale facilities. Additionally, engineering and manufacturing companies, along with technology companies, are likely to set up centres Developing its own dedicated R&D laboratories.

India is actively promoting the development of the center sector through specific policies aimed at attracting data center operators and investors. Many states have recognized data centers as an “essential service”. Uninterrupted operations throughout the year. These policies include provisions for uninterrupted electricity supply, access to renewable energy, fuel subsidies, basic infrastructure support for small and medium-sized enterprises, server and rack suppliers, and financial incentives and subsidies for battery manufacturing within jurisdictions. . These incentives play an essential role in opening many investment opportunities across the country. Staying in the spotlight for the commercial real estate industry in the Asia Pacific region, with notable market developments across the region. In India, 2023 was a quiet year for leasing as many companies remained in a wait-and-see mode amid the global economic slowdown. However, activity began to recover strongly in Q4 2023, and there is a significant volume of agreements in the pipeline. Demand for hyperscalers continues to grow, with many groups expanding to take on AI workloads. Some super entrepreneurs have purchased land to develop their facilities.”