There has been a significant growth in private equity (PE) investments in data centres in India, according to a report by Knight Frank.
According to the report titled ‘Investments in Real Estate – trends in private equity investments in India (Q1 2022),’ PE investments in the sector stood at $2.2 billion in 2021 ($22,09 million), a whopping 259 per cent increase on the $616 million received in 2016. It totalled $396 million in 2020.
The total investment in five asset classes – office, residential, retail, warehousing and data centres – stood at $8.4 billion ($8,408 million) in 2021.
Data centre investments accounted for 26 per cent share of the total PE investments . Office accounted for 34 per cent share, retail 10 per cent, warehousing 16 per cent and residential 14 per cent share.
“The share of data centres in the total PE investments in real estate in India has risen significantly from 2016 to 2021,” the report said.
It added that foreign investors accounted for approximately 96 per cent of the total PE investments in data centres in India since 2011.
“Data centre growth in India has been significant over the last five years, with investments from real estate players as well as PE funds, to set up various categories – from colocation, hyper-scale, managed services to edge data centres,” the report said.
While the focus has primarily been on metro and Tier-1 cities such as Mumbai, Chennai, Bengaluru, and Hyderabad, investors have also shown interest in other areas such as Pune and Indore.
Mumbai has received the largest cumulative volume of investments since 2011 at $851 million, followed by Bengaluru at $427 million. Delhi received cumulative PE investments of $235 million in Data Centres in the same period.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “In India, the current capacity of data centres in relation to the volume of data created is low, which leaves open the space for creation of more data centres. Going forward, India’s growing reliance on digital payments, ever-increasing data consumption, and a surge in e-commerce usage would need enhanced digital infrastructure, making data centres a sunrise sector with high investor interest.”
“The significant rise of data generation and its consumption across industries has led to a steep rise in demand for data servers and data centres globally,” the report further said.
According to the Cloudscene data of 110 countries, as of January 2022, there were 8,347 data centres globally. Of these, the top five house more than 50 per cent of the data centres: the US (33.1 per cent), the UK (5.8 per cent), Germany (5.5 per cent), China (5.4 per cent) and Canada (3.9 per cent). India’s share stands at 1.5 per cent.
Published on
May 23, 2022
