South India’s data centre market to witness 65% capacity growth by 2030

The data center market in South India is experiencing significant growth, particularly in key cities such as Chennai, Bangalore, and Hyderabad driven by government incentives, strategic infrastructure investments, and increasing demand for digital services.The region is poised to substantially impact the global data centre landscape, with an anticipated 65% increase in capacity by 2030. The combined installed data center capacity in Chennai, Bangalore, and Hyderabad is around 200 MW. “This capacity is expected to grow significantly, with 190 MW currently under construction and an additional 170 MW in the planning stages. These developments are projected to result in an 80% increase in total capacity over the next few years, highlighting the region’s crucial role in supporting global digital infrastructure, mentioned Colliers. “Chennai data centre market exemplifies the city’s commitment to technological advancement and innovation. With its strategic coastal location, robust government initiatives concerning Industrial Policies and sector-specific Policies for Data Centers, Including Cyber Security, followed by the support infrastructure facilities and availability of developable land parcels at low cost, Chennai will continue to drive and lead the digital economy forward.”, said Umakanth Y, Senior Director, Advisory Services, Colliers India.Chennai’s Southern region has a leading data centre hub with a strategic coastal location and robust submarine cable connectivity. The city currently has an installed capacity of 87 MW, with 156 MW under construction and 104 MW planned. Chennai’s favourable climate and robust power infrastructure make it an appealing location for data centre investments.The report mentioned that Bangalore, known as the Silicon Valley of India, capitalises on its robust IT ecosystem. The city currently has an installed capacity of 79 MW, with 10 MW under construction and 26 MW in the planning stages. Bangalore’s technological prowess and availability of a skilled workforce are key drivers for its burgeoning data centre market.Thanks to proactive government policies and excellent connectivity, Hyderabad is rapidly establishing itself as a data centre hotspot. The city has an installed capacity of 47 MW, with 20 MW under construction and 38 MW planned. Hyderabad’s competitive real estate market and robust infrastructure are significant advantages.Additionally, Tamil Nadu, Karnataka, and Telangana governments have also played a vital role in promoting the growth of data centres through various incentives. These include substantial subsidies on land acquisition, reduced power tariffs, and significant tax breaks, making South India an attractive destination for data center investments. Power and telecommunications infrastructure investments ensure high-speed, reliable connectivity, crucial for data centre operations.The introduction of dedicated data centre policies by various states has provided a clear and structured framework for investors, enhancing the region’s appeal. The occupier landscape in Chennai, Bangalore, and Hyderabad is diverse and dynamic, with BFSI dominating the market, followed by IT firms, hyperscalers, and other sectors.Separately, occupiers are also increasingly seeking additional services to optimise their operations, such as managed services, security solutions, disaster recovery, and edge computing. The monthly recurring charges for data centres in South India are competitive, ranging between Rs 6,650 – 8,500 kW per month, offering significant value for money given the advanced infrastructure and extensive range of services.The outlook for South India’s data center market in Chennai, Bangalore, and Hyderabad is positive, with increasing demand driven by cloud service adoption, digital transformation initiatives, and emerging technologies like 5G and IoT. The market is set for substantial growth, underpinned by significant investments, strategic government incentives, and a diverse occupier base.Going ahead, the anticipated 80% increase in data center capacity by 2030 across Chennai, Bangalore, and Hyderabad highlights the region’s growing strategic importance in the digital infrastructure ecosystem. With sustained government support and continuous infrastructure development, South India is set to become a global data centre hub.



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