Spotlight on India: Growing demand for data centres, and other news

For PropertyGuru’s real estate news roundup on India, the Indian data centre market’s growth is driven by the increasing demand for AI and cloud computing. In other reports, India’s leading eight residential markets experienced a year-on-year decline in both housing sales and new launches. Lastly, India and Pakistan need to come together to solve the struggle against smog.

Digital India’s growing demand for data centres

Growing demand for AI and cloud computing, coupled with supportive government policies, are driving a growing Indian data centre market.

Savills data show 71MW of IT capacity (data centres are measured by the amount of power they offer for usage, rather than floorspace) added in the first half of this year, bringing the Indian total to 942MW. Meanwhile, 200MW of capacity was taken up by users, mainly ‘hyperscalers’ which provide cloud computing services.

Arvind Nandan, Head of Research & Consulting at Savills India, says: “India is well positioned to serve as a regional data centre hub in Asia. The adoption of 5G, increased use of internet services in Tier 2 and 3 cities, the Internet of Things (IoT) and Artificial Intelligence (AI) are likely to drive demand for data centres.”

India’s total data centre IT capacity has grown 22 percent each year since 2014, with the majority of capacity (517.2MW or 54.9 percent of the national total) located in Mumbai. The financial capital also has more data centre capacity underway (1209MW) than the rest of the nation combined.

Other cities are set for substantial data centre expansion; for example Hyderabad has 48.3MW IT capacity today, but 431MW in the pipeline, while Chennai has 115.5MW and 271.5MW of supply. Supply in excess of 2,000 MW IT capacity is expected between 2024 to 2030 across the major cities in the country.

Some market observers believe data centres used for AI training could be built in secondary locations with access to renewable power, as they do not require low latency (the delay in accessing digital information).

India’s top 8 cities see 5 percent drop in sales, 25 percent fall in new launches: Proptiger report

India’s leading eight residential markets experienced a year-on-year decline in both housing sales and new launches during the July-September quarter of 2024, as revealed in the latest ‘Real Insight Residential Report’ by PropTiger.com, part of REA India, which also owns Housing.com. A sharp increase in home prices—averaging a nearly 20 percent increase across the top eight cities—impacted affordability leading to a 5 percent YoY drop in overall sales. New launches witnessed a more significant 25 percent YoY decrease compared to the same quarter in 2023.

Vikas Wadhawan, CFO of REA India and business head of PropTiger.com, commented in Housing.com, “The year-on-year decline in both sales and new launches reflects the market’s response to rising prices. While the demand and supply for homes moderated during the April-June period due to the General Elections and a temporary slowdown in the approval process during July-August, consumer sentiment remains positive. This is driven by strong market fundamentals, which continue to encourage real estate as a preferred investment avenue.”

Why India and Pakistan should come together against the smog

Maryam Nawaz Sharif, chief minister of Pakistan’s Punjab, recently called for joint efforts with India to combat growing pollution and smog in the region, according to The Indian Express. Sharif’s bid to deal with environmental issues in a Subcontinental manner is more a matter of urgency than both states seem to believe. This is not to say that efforts haven’t been made to mitigate the implications of climate change and tackle some of these problems, but the major roadblock is that these are, by and large, transboundary issues. To effectively combat them, the measures taken need to transcend borders that have been arbitrarily drawn regarding the environment. The days when environmental issues were merely projections about the future are long gone. Today, they take on a much more tangible form and impact the lives of millions. India and Pakistan share many issues, courtesy of their similar terrain, shared water sources and common airshed.

At this time of year especially, with both the burning of crops and festivals, air pollution tends to be at an all-time high. Six major airsheds span multiple of India and Pakistan’s cities, and following wind patterns, pollutants are blown across borders. Large cities such as Delhi and Lahore fall within these airsheds and are impacted by the increase in pollutants within other regions. Pollutants such as PM 2.5 and PM 10 are responsible for causing and exacerbating respiratory issues, and in addition to burdening healthcare systems, this also translates to economic losses. The Indian economy lost USD37 billion to just pollution-related illnesses and deaths. Similarly, Pakistan’s Punjab region, behind many of its outputs, sees flights delayed and educational institutions shut yearly due to pollution and smog. On average, citizens in Lahore reportedly lose a whopping five years of their lifespan to air pollution.

The Property Report editors wrote this article. For more information, email: [email protected].