This Southern City Could Be India’s Second-Hottest Market for Data Centers

Great location, low construction costs and multiple submarine cables could make Chennai an ideal growth market for building data centers.By Jude Sannith, CNBC TV18
September 3, 2020

A combination of great location, cheaper construction costs and multiple submarine cable landing stations could make Chennai an ideal growth market for building data centres, a JLL study has revealed.

JLL’s report on data centres in India says that Chennai will add a total of 134 MW of capacity addition in data centres by 2025 — the highest after Mumbai.

The city’s commercial realty hubs like Ambattur and Siruseri could lead the charge as locations for new capacity addition, says JLL. Competitive land and construction prices in Chennai, along with its lowest vacancy rate of 6 percent among metropolises could also be supporting factors in Chennai leveraging its data centre muscle.

India’s data center capacity, the company says, is expected to grow from 375 MW in H1 2020 to 1,078 MW by 2025, which in turn could present an investment opportunity totalling to $4.9 billion.

“The primary reason for Chennai to become the second-fastest growing hub for data centres is not only its submarine cable landing, but the city’s geographical proximity to key Asian cities,” says Siva Krishnan, Managing Director (Chennai), JLL.

Daily data consumption rose nationally in the first six months of 2020, especially during the nationwide COVID-19 lockdown. This number spiked from 270 PB (petabytes), pre-lockdown, to 308 PB since the lockdown was announced in March.

Thanks to work from home (WFH) and the sharp drop in mobility during the lockdown, the data centre business in JLL’s words became the “backbone” of the digital economy even as it ensured digital continuity.

“Given shifts in the economy, we will continue to see data consumption increase manifold for the foreseeable future,” says Rachit Mohan, India Head, Data Center Advisory, JLL.

States like Andhra Pradesh and Bihar accounted for a 12 percent rise in data consumption, and Maharashtra consumed 7 percent more data that it normally consumes.

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