Data Centre Update: H1 2022
Data centre industry capacity to double up by 2024 to 1318 MW
- Samantak Das
- Rohan Sharma
India’s 825 million internet subscribers have been driving the growth of digital usage in many ways. Sample this:
- 28% increase in average data usage per user to 15.8 GB in Mar-22 from 12.3 GB in Mar-21
- Strong growth in digital payments - 58 transactions per second in FY 21 to 95 transactions per second in FY-22 (64% increase)
- 5x rise in Over-The-Top video paid subscriber base in last three years to 70-80 mn users in 2021
The sustained growth in data consumption is leading to high demand for data centres which are at the heart of the digital revolution. The Indian data centre industry has been on a high growth clip and reached 637 MW as of H1 2022 and is expected to reach 1318 MW by 2024. Some of the key trends in supply and absorption during the first six months of 2022 are as follows:
1.9x growth in absorption during H1 2022 at 89 MW
Data centre demand witnessed robust growth with estimated absorption of 89 MW during the first of 2022, as against 47MW during H1 2021. The delivery of pre-committed supply to cloud service providers has led to sharp growth in absorption. Mumbai continues to lead the demand pie with a 65% share of absorption since cloud players continue to increase their footprint as the migration to the cloud has been gaining pace. Pune accounted for a 10% share due to periodic space taken by hyperscale cloud players while Chennai took up a 9% share of total absorption.
Delivery of pre-committed space led to 86 MW supply during H1 2022-1.6x growth over H1 2021
The supply growth has been in sync with absorption trends as 86MW supply addition has been estimated during H1 2022. Operators have been following the strategy of building capacity based on pre-commitments by hyperscale cloud players with a minimal speculative capacity build. As a result, overall occupancy stood at 92.5 % of the supply. Mumbai and Chennai together accounted for 83% of the supply during the first half of 2022.
Supply addition to create 7.8 mn sq ft real estate demand entailing USD 4.6 bn Capex
The expected supply addition of 681 MW will need 7.8 mn sq ft of real estate space by 2024. Mumbai on account of the highest share of capacity addition would entail a demand of 4.6 mn sq ft, followed by Chennai at 1.9 mn sq. ft and NCR-Delhi at 0.7mn sq ft. As most DC operators are acquiring land for setting up data centres, they would have to rely on EPC players for the completion of projects. Various regulatory and construction approvals and construction periods would lead to a 3-4 year timeframe for the capacity to become operational. Some players are opting for the conversion of existing office space to DC facilities by using retrofit options to meet technical parameters.