India’s Data Centre Absorption is at approx 200MW IT Capacity in H1 2024: Savills India

July 31, 2024: In H1 2024, approximately 71 MW of IT capacity was added across key data centre micromarkets, according to the latest findings by Savills India, a global real estate advisory firm. This marks significant growth, with total stock increasing by 21% year-on-year from 778 MW in H1 2023 to 942 MW in H1 2024. Concurrently, the market witnessed transactions totaling around 200 MW in IT capacity during this period. This demand was driven by hyperscalers, BFSI (Banking, Financial Services, and Insurance), IT & ITeS, and service sectors, all relying heavily on data centre operators for colocation and related services.

As of H1 2024, the operational IT capacity stood at approximately 942 MW, reflecting a compounded annual growth rate (CAGR) of 22% since 2014, when it was 158 MW. Mumbai led the way with a substantial 54.9% share of the total capacity, followed by Chennai (12.3%), Bengaluru (8.2%), and Pune (7.2%). Hyperscalers accounted for 22% of the total stock, while enterprises held 10%. The remaining 68% was utilized by a combination of hyperscalers and enterprises, showcasing a diverse utilization pattern within the data centre industry.

DC Supply and Forecasts in MW of IT Capacity across the Major Cities 

Source: Savills India Research

While major absorption has been recorded in Hyperscalers across major cities, colocation services followed closely witnessing significant growth. This shift can be attributed to factors such as high CAPEX and OPEX, along with ambiguity in predicting future demand and scalability. Moreover, other factors such as the high cost of security systems and high-performance GPUs, along with elevated real estate costs, are making enterprise colocation increasingly attractive for businesses and, consequently, for operators. 

“We project a strong demand for data centre capacity in India by the end of 2024, with an estimated requirement of 400 MW across major cities. While supply is expected to reach 350 MW during the same period, data centre operators are expanding their service offerings beyond colocation to include networking, cloud solutions, specialized hardware like GPUs, and other managed services. This growth is being driven by surging internet usage, the rise of 5G and the need for ultra-low latency for mobiles, which is also creating a growing demand for edge data centres in specific areas. Furthermore, increasing adoption of AI and IoT across various industries is fueling the need for data centre services, with GPU-powered solutions playing a key role in addressing these demands.” – Srihari Srinivasan, Director & Lead Data Centre Services, Savills India. 

x