HomeNewsHyderabad is emerging as the new data center hotspot

Hyderabad is emerging as the new data center hotspot

Hyderabad is emerging as the new data center hotspot and according to JLL report titled ‘2020 India Data Center Market Update,’ the city’s data center is expected to triple by 2023. The city is expected to add 66 MW during 2021-23.

Regulatory incentives, competitive construction costs and a large user market are acting as catalysts enabling the city to emerge as data center hub. The city which currently account for 7% share of colocation data center capacity is expected to reach 10% share by 2023.

India’s colocation data center industry witnessed unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America. Fuelled by longer-term trends of rising cloud adoption, increasing digitalisation and progressive legislation, the industry anticipates increased demand for colocation space nationwide. Rising demand led data center operators and developers to pursue ambitious expansion plans, while some adopted the acquisition route to enter Indian markets, which is expected to continue.

As the data centre landscape continues to evolve, the industry is expected to grow exponentially to reach 1,007 MW by 2023 from its existing capacity of 447 MW. With the growing reliance on digital connectivity, demand is likely to ramp up further due to the imminent rollout of 5G rollout, IoT-linked devices, data localisation and cloud adoption. India’s data center sector will require an investment of USD 3.7 billion over the next three years to fulfil the 6 million sq. ft greenfield development opportunity for the industry.

Mumbai and Chennai are expected to drive 73% of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR emerging as new hotspots. Robust pre-commitments by global cloud players in the established markets of Mumbai and Pune continues owing to prevailing infrastructure, while new markets like Hyderabad are gaining momentum in this space.

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