CBRE expects that global players are likely to continue to take interest in investing in the country, with a focus on backing leading operators or funding prominent developers to foray into the DC segment in 2020.
On the back of various policy initiatives, widening customer base and increasing corporate requirements for data storage, CBRE today shared key findings that delved into the Data Centre (DC) market and highlighted top trends that will shape the segment in 2020.
Supporting the growth of Data Centre capacity in India, the findings highlighted that markets across Mumbai, Chennai, Bangalore, Kolkata, Hyderabad, Pune and NCR are expected to witness supply addition of upto 40% in 2020. Out of this, Mumbai currently leads with 41% data centre capacity, followed by Bangalore (17%) and Delhi (16%).
With growing digital consumption patterns such as online gaming, online education, streaming, e-commerce, total internet hits etc., DC operators are expected to see a huge demand for data center space, thereby scaling up their DC facilities quickly to serve Hyperscalers & enterprise clients. These developments allow for enterprise CIOs and technology leaders to engage with CBRE for streamlining their businesses in new site selection and acquisitions for footprint expansion.
Commenting on the Data Centre market in India, Mr. Anshuman Magazine, Chairman & CEO – India, South East Asia, Middle East & Africa, CBRE said “In the era of the fourth industrial revolution, we expect regulatory support to augment the Data Centre demand in India. Policy impetus such as the National E-commerce Policy, Personal Data Protection Bill, proposed policy on Data Center Parks and digital initiatives by the government will accelerate demand. The COVID-19 situation will further propel the next wave of growth in the sector and most importantly, the proposal to give DCs the coveted ‘Infrastructure status’ will place them high on global investor radar”.
Top trends expected to shape the Data Centre (DC) industry: –
Fund deployment towards DCs to rise:
CBRE expects that global players are likely to continue to take interest in investing in the country, with a focus on backing leading operators or funding prominent developers to foray into the DC segment in 2020. Further, against the backdrop of the COVID-19 situation in India, corporates would be inclined towards investing in the cloud and hybrid IT infrastructure, as operations would move online and employees may need to continue to work from home.
Transition from captive to co-location and cloud DCs:
Occupiers’ demand for co-location space over captive DCs is further likely to boost due to categorization of third-party DCs as ‘Essential Services” ensuring uninterrupted and uneventful operations even during a pandemic situation like the world is facing today. With regulatory requirements for data storage expected to be implemented in the coming quarters, CBRE anticipates that corporates would now seriously re-evaluate their DC portfolios in the country.
- Edge computing to become a part of DC portfolios: CBRE anticipates that cities such as Kolkata, Pune, Gurgaon, Kochi and Jaipur, particularly, are likely to be amongst the first ones to witness edge DCs in the next few years on the back of their ability to service specific geographic zones.
- Sustained policy impetus to spur DC demand: The passage of policies such as the National E-commerce Policy and Personal Data Protection Bill are likely to mandate Indian consumers’ data to reside within the country, thereby boosting the demand for data centers. Further, large-scale, nationwide initiatives such as ‘Make in India‘, ‘Digital India’ and Smart City Mission in particular would further augment DC demand.
Mr. Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE South Asia Pvt. Ltd. said, “Demand for outsourced Data Centre solutions has increased in India and we understand that occupiers would require flexible, scalable DC solutions that are both operationally and financially optimal. By drawing on our extensive experience, we can incorporate best practices from industry peers across IT strategies and ensure our clients are optimizing architecture and creating a robust and efficient infrastructure. Technology and automation would provide significant opportunities in terms of how data center operations evolve as we move forward in the next 3-5 years.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide.
CBRE was the first International Property Consultancy to set up an office in India in 1994. Since then, the operations have grown to include more than 10,000 professionals across 10 offices with a presence in over 80 cities in India. As a leading international property consultancy, CBRE provides clients with a wide range of real estate solutions, including Strategic Consulting, Valuations/Appraisals, Capital Markets, Agency Services and Project Management.
The guiding principle at CBRE is to provide strategic solutions that make real estate holdings more productive and economically efficient for its clients across all service lines.