India's Data Centres Expected To Attract $23 Billion Investments By 2033, Driven By Digital Transformation: Report

Over the next decade, India could witness investment worth up to $23 billion for data centre capex as an infrastructure asset.

These investments are propelled by the rapid growth in data consumption and storage. The government's focus on data localisation and the demand for high bandwidth, driven by the launch of 5G, further contribute to the investment trend.

Real assets investments in data centers are projected to grow significantly, according to a report by investment banking firm, Avendus Capital, reports the Mint.

With an annual growth rate of 40 per cent, the segment is expected to reach 1,700 MW capacity by 2025, backed by over $5 billion investment.

Developers anticipate that the demand for data centres will exceed 3,000 MW, which is nearly four times the installed capacity of 800 MW in 2022.

Avendus Capital's MD and Head of Infrastructure and Real Assets Investment Banking, Prateek Jhawar, expressed optimism for India's growth opportunity in the segment.

According to the report, he said: “Global investors are most likely to partner with domestic players, owing to their access to land banks, ability to procure regulatory approvals, as well as their civil, mechanical and electrical fit-out capabilities.

"We expect real estate developers and investors to evaluate the option of converting their underlying portfolio into REITs, creating perpetual yield income, much like their global counterparts."