South India’s Data Centre Capacity Set for 65% Growth by 2030

Bengaluru, India, 11th July 2024:  South India’s data centre market is on an impressive growth trajectory, with major cities like Chennai, Bangalore, and Hyderabad at the forefront. This surge is supported by substantial government incentives, strategic infrastructure investments, and a rising demand for digital services. The region is poised to play a crucial role in the global data centre landscape, with capacity projected to grow 65% by 2030.

Significant Capacity Expansion

As of now, the combined installed data centre capacity in Chennai, Bangalore, and Hyderabad stands at approximately 200 MW. This foundation is set to be significantly bolstered, with 190 MW currently under construction and an additional 170 MW planned. These developments are expected to increase the total capacity by 80% over the next few years, underscoring the region’s strategic importance in supporting global digital infrastructure.

City-wise Data Centre Dynamics

Chennai is a prime data centre hub due to its strategic coastal location, offering excellent submarine cable connectivity. The city has an installed capacity of 87 MW, with 156 MW under construction and 104 MW planned. The favourable climate and robust power infrastructure make Chennai an attractive destination for data centre investments.

Bangalore, known as the Silicon Valley of India, leverages its strong IT ecosystem. The city currently has an installed capacity of 79 MW, with 10 MW under construction and 26 MW in the planning stages. Bangalore’s technological prowess and availability of skilled workforce are key drivers for its growing data centre market.

Hyderabad is rapidly emerging as a data centre hotspot, thanks to proactive government policies and excellent connectivity. The city has an installed capacity of 47 MW, with 20 MW under construction and 38 MW planned. Hyderabad’s competitive real estate market and robust infrastructure are significant advantages.

Data Centre Market Data – Capacity

Location Installed Under Construction Under Planning
Mn sqft MW Mn sqft MW Mn sqft MW
Chennai 1.7 87 2.3 156 1.6 104
Bangalore 2 79 0.1 10 0.3 26
Hyderabad 1 47 0.3 20 0.5 38
South India 4.7 213 2.7 186 2.4 168

Source: Colliers

Government Incentives and Policy Support

State governments in Tamil Nadu, Karnataka, and Telangana have been instrumental in fostering data centre growth through a range of incentives:

Subsidies and Tax Benefits: Substantial subsidies on land acquisition, reduced power tariffs, and significant tax breaks are provided to make South India an attractive destination for data centre investments.

Infrastructure Development: Investment in power and telecommunications infrastructure ensures high-speed, reliable connectivity, a critical component for data centre operations.

Ease of Doing Business: Simplified regulatory frameworks and expedited approval processes reduce bureaucratic hurdles, encouraging swift project initiation and completion.

Dedicated data centre policies introduced by various states provide a clear, structured framework for investors, enhancing the region’s appeal.

Diverse Occupier Landscape

The occupier landscape in Chennai, Bangalore, and Hyderabad is diverse and dynamic. According to recent data, BFSI dominate the market, accounting for nearly 35% of total occupancy. IT firms follow with 30%, while Hyperscalers occupy 20% and other sectors constitute the remaining 15%.

Occupiers are increasingly seeking additional services to optimize their operations, which include:

Managed Services: Comprehensive IT management solutions that enable businesses to focus on core activities.

Security Solutions: Advanced security measures such as encryption, threat detection, and incident response services.

Disaster Recovery: Robust disaster recovery solutions ensuring business continuity in the face of unforeseen events.

Edge Computing: Proximity to end-users to reduce latency and improve service delivery, essential for IoT and real-time data processing.

Competitive Pricing and Service Offerings

The monthly recurring charges for data centres in South India are competitive, ranging between 6,650 – 8,500 INR/kW/Month according to the usage, offering significant value for money given the advanced infrastructure and extensive range of services provided. This competitive landscape ensures continuous upgrades and enhancements by service providers, meeting the evolving needs of occupiers.

Outlook

The outlook for South India’s data centre market in Chennai, Bangalore, and Hyderabad is exceedingly positive. The combination of strategic location, robust government support, and technological advancements positions these cities as pivotal players in the global data centre industry.

Demand for data centres is expected to rise continually, driven by increasing cloud service adoption, digital transformation initiatives by enterprises, and the advent of new technologies such as 5G and IoT.

South India’s data centre market, particularly in Chennai, Bangalore, and Hyderabad, is set for substantial growth, underpinned by significant investments, strategic government incentives, and a diverse occupier base. The competitive pricing, advanced infrastructure, and additional service offerings make these cities attractive destinations for data centre investments. As South India continues to develop its digital infrastructure, it is poised to play a pivotal role in the global data centre market, offering immense opportunities for investors and occupiers alike.

The anticipated 80% increase in data centre capacity by 2030 across Chennai, Bangalore, and Hyderabad highlights the region’s growing strategic importance in the digital infrastructure ecosystem, with sustained government support and continuous infrastructure development, South India is set to become a global data centre hub.”, says Swapnil AnilExecutive Director & Head of Advisory Services, India

Chennai Data Centre Ecosystem

Of the South Indian State, Tamil Nadu State witnessed a positive growth and revive & contribute heavily to India’s GDP. It’s evident that the Southern metropolis always has been a ‘favourable’ investment destination and has a significant proportion of investment proposals of INR 50,000+ crores.

Comparing the industrial ecosystem, Tamil Nadu, always been leading in automobile, wind energy, and electronics hardware manufacturing sector. However, in the recent years, due to the stable system of governance and its related policies, Tamil Nadu, especially the Chennai region has emerged as a data centre capital of India.

The government is also proactive in providing 24/7 power facilities, followed by land, connectivity infrastructure for DCs, fiscal & non-fiscal incentives, and promoting renewable energy use for everyday management. This has created a supportive technology bubble and also acts as a catalyst for industries to set up data centres.

It has to be noted that Tamil Nadu was the 1st state to come up with ethical AI, blockchain, and cyber security policies in the country. And Chennai is already geared up to provide a ready, built and well-established supply chain for data centres to integrate scale within the region.

Chennai is a prime data centre hub due to its strategic coastal location, offering excellent submarine cable connectivity. The favourable climate and robust power infrastructure make Chennai an attractive destination for data centre investments. Chennai is also a popular option for DC colocation firms since it provides an abundance of experienced IT & Non-IT talent, along with strong manufacturing bases and lower setup costs. As a whole, the city is an excellent location for data centers because of its attractive cost structure and ample land supply.

Chennai data centre market exemplifies the city’s commitment to technological advancement and innovation. With its strategic coastal location, robust government initiatives with respect to the Industrial Policies and sector specific Policy for Data Center including the Cyber Security, followed by the support infrastructure facilities and availability of developable land parcels at low cost, Chennai will continue to drive and lead the digital economy forward.”, said Umakanth Y, Senior Director, Advisory Services, Colliers India.

Pune’s Real Estate Boom – Is Now the Perfect Time to Invest?

akash pharande

By-Akash Pharande, Managing Director – Pharande Spaces

Pune, one of India’s most vibrant real estate markets, has experienced rapid changes over the past few years. Latest data from leading real estate consultancies show a scenario of strong housing price increases and ongoing changes in market dynamics, pointing towards further price hikes in the future.

According to real estate consultants Anarock, Pune and the Mumbai Metropolitan Region (MMR) saw over 50% of the overall housing sales in Q2 2024 among the top seven cities. This is a resounding statement for Pune — a city once considered the laid-back cousin of the financial capital and is now competing in the same league.

Rising Property Prices: A Continuum

Recent data from various leading consultancies clearly show Pune’s trend of rising property prices. There has been a significant 20-23% year-on-year increase compared to Q1 2023. This resilience and rising demand are driving prices higher. Several factors explain Pune’s growing housing prices

– Economic Growth & Employment Opportunities: Pune’s real estate market has improved significantly due to its development into a major IT and manufacturing center. High demand from professionals seeking homes near their workplaces has led to a surge in property values in and around IT parks and manufacturing hubs.

– Infrastructure Development: Ongoing and planned infrastructure improvements such as road extensions, new flyovers, and the Pune Metro are boosting the city’s property values and connectivity. This dynamic is evident across Greater Pune, which includes the Pune Municipal Corporation (PMC) and the infrastructure-driven Pimpri-Chinchwad Municipal Corporation (PCMC).

– Shift in Housing Segments: Pune’s housing market is now driven by mid-range and premium-to-luxury housing, thanks to higher demand for such options. The higher purchasing and borrowing power of the target clientele supports ongoing price increases.

pune real estate

So – Buy Now or Later?

To answer this very important question, it is necessary to consider some fundamentals. Pune’s strong economic growth draws professionals and families from various industries. The city offers a high livability quotient, better housing affordability, and a superior climate compared to neighboring Mumbai. It also boasts top-grade healthcare and education options and proximity to Mumbai, Maharashtra’s main economic hub.

Pune has delivered an overall residential price appreciation of well over 20% in just one year. Naturally, both end-users and investors find the city very appealing, especially considering its rapid growth since 2020, which saw Pune’s lowest year for housing demand in the last decade due to the COVID-19 pandemic.

Job losses, economic disruption, and the disappearance of construction labour brought building activity to a halt. The lockdowns caused a significant decline in real estate market demand and supply.

But in 2021, the market began to bounce back powerfully. With a 17% year-on-year increase, Pune saw the highest property sales since 2013. Buyer confidence increased steadily. In 2023, the Pune housing market rebounded remarkably. The current year is poised to set new benchmarks.

The writing is clearly on the wall — there is no stopping the Pune housing market, and a wait-and-watch stance can cost buyers dearly. For those who want to buy a home in Pune, either to live here or to reap investment returns, there is a strong argument for acting now. Historical data and current patterns clearly imply that the city’s property values will keep rising.

Given the continuous growth of the city and its expanding economic base, homes bought now will deliver significant value addition over time. Pune is currently second only to Mumbai in new residential launches and sales and is also attracting increasing interest from institutional investors eyeing its commercial real estate market.

This means more workplaces, more jobs, and even higher housing demand driving prices steadily northward. For potential buyers and investors, the message is clear – there is no equity in waiting for a more opportune time in Pune’s thriving housing market.

About the Author:

Akash Pharande is Managing Director – Pharande Spaces, a leading real estate construction and development firm famous for its township projects in Greater Pune and beyond. Pharande Promoters & Builders, the flagship company of Pharande Spaces and an ISO 9001-2000 certified company, is a pioneer of townships in the region. With the recent inclusion of Puneville Commercial into one of its most iconic townships, Pharande Spaces taken a major step towards addressing Pune’s current and future requirements for fully integrated residential-commercial convenience