August 28, 2020

Imagine your life without Data? A little hard. Isn’t it?

Over the years, the role and the meaning of Data in our lives have changed dramatically. Now we interact and consume data in innumerable and unrecognizable ways. For companies, Data is the new oil. It is the map without which they will be lost. And with this increasing dependence, there’s an establishment which is hard to ignore – Data Centre, the backbone of telecommunications and storage systems.

Data centers house a network’s most critical systems and are vital to business continuity and operations. With the increasing advancement of technologies, people depend more on data centers as they offer higher security levels, flexibility, and accessibility to Data and information around the world.

As per CBRE’s 2020 Asia Pacific Investor Intentions Survey, 30% of investors in the region consider purchasing data centers this year, which is a substantial increase from the 18% recorded in 2019. Data centers take on an increasingly prominent role with Big Data, Industry 4.0, Internet of Things (IoT), 5G, and cloud computing. A trend accelerated by the surge in data storage and processing requirements resulting from increased remote working levels during the COVID-19 pandemic. Along with rising end-user demand, investors are also looking at data centers as a promising asset class, providing stable income streams.

All eyes on India

Data centers have been one of the best performing assets, providing higher rate of returns, which is why global players will continue to take an interest in investing in India, with a focus on backing leading operators or funding prominent developers to foray into the DC segment in 2020.

Data centre development in India is expected to pick up pace in the medium term, supported by a new government policy in the pipeline that is expected to enable the private sector to build data centre parks across the region. This will create more investment opportunities for investors.

We can substantiate this with the following example of two cities that are leading the new #DCWave:

  • Mumbai

Mumbai is India’s largest data centre colocation market, with a total IT capacity of 215 MW. Outsourcing demand continues to grow, driven by cloud players and technology firms looking to cater to the high number of large financial institutions and other major corporates with headquarters in the city. New supply in Mumbai has ramped up in recent years, supported by strong investment demand. Upcoming supply is also significant, with many established global operators looking to expand and enter the market.

  • Chennai

Chennai is attractive to international cloud data centre players owing to its coastal location, which provides substantial cost arbitrage through the use of direct submarine lines. Government subsidies for data centre development are also an appealing incentive. Demand in the city is increasing owing to the strong presence of domestic tech firms and overseas automotive and financial firms, which are looking at Chennai as a primary data storage location as well as a secondary or disaster recovery site.

Investor interest in data centres have strengthened in the current COVID-19 outbreak, with investors expressing increased interest in data centres, compared to the previous year. Corporates are also inclined towards investing in the cloud segment as business moves online and both employees and employers prefer the work from home option. In India, Data centres will continue to enable the digital world, which has been more crucial now than ever.

 

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