JLL Data Centre Update h1 2023

Research
India
November 2023
Data Centre Update

H1 2023 jll.co.in
Powering the new phase of AI growth

H1 2023 Data centre report
Preface
A new wave of digital transformation started in 2023 with the representing a 34% decrease compared to the same period
launch of Chat GPT, an artificial Intelligence (AI) chatbot, which last year. Consequently, the industry experienced low vacancy
reached a milestone of 100 million users in just two months. levels of 6.7% due to reduced supply additions.
Generative AI and Machine Learning (ML) have opened up a Looking forward, we project robust growth for the industry,
world of possibilities, resulting in a surge in compute usage with an estimated increase of 693 MW from the second half of
across multiple applications. As a result, we anticipate a 2023 to 2026. This growth will necessitate an additional
substantial increase in the demand for high computing and 8.8 million sq ft of real estate and fresh investments of
storage servers, driving a new wave of growth for high-end $4.4 billion. However, such substantial growth also presents
data centres on a global scale. challenges, particularly concerning power availability in
key markets such as Navi-Mumbai and Chennai. However,
Data centres are poised for incremental demand along we can find some respite in the recent commissioning of a
with existing drivers of digital transformation. Asia Pacific is 1,000 MW transmission line in Mumbai, which is expected to
expected to benefit from this demand due to the availability of alleviate this concern.
resources and the growth of AI-led innovations in the region.
Indian data center industry is diligently preparing to meet the The Indian digital landscape has been abuzz with numerous
demands from this evolving landscape. noteworthy developments in 2023, painting a promising
picture of future growth. Key highlights include the passage
Indian DC operational capacity stood at 778 MW with the first of the Digital Personal Data Protection Act, the accelerated
half of 2023 posting normal growth in light of the fact that rollout of 5G technology, the establishment of a robust
there was an unprecedented surge in demand during 2022 digital public infrastructure, and the advent of new cable
due to pandemic led spurt in use of digital infrastructure. landing. Additionally, significant partnership deals for AI/ML
Demand from hyperscale Cloud Service Providers (CSP) development in India and the entry of a large telecom player
moderated during H1 2023, resulting in a 26% y-o-y decline in via a joint venture further signify the high-growth phase that
absorption to 66 MW. Industry capacity followed the demand the Indian data centre industry is entering. Indian DC industry
Rachit Mohan
trends, indicating a normalization of industry dynamics. being the enabler of digital transformation is expected to APAC Lead - Data Centre Leasing and
During the first half of 2023, an additional 57 MW was added, witness secular growth in the long term. India Lead - Data Centre Transactions
2
Key highlights
Industry live capacity stood Tight vacancy of 6.7% as Absorption in normal range Data protection law
at 778 MW with occupancy of demand exceeds supply at 66 MW during H1 2023 compliance to open up new
726 MW as of June 2023 during H1 2023 colocation opportunities
34% y-o-y decline in supply
at 57 MW during H1 2023
Industry capacity to grow at 8.8 mn sq ft real estate space Faster 5G rollout to support AI led demand growth for
20% CAGR in next 3.5 years required by 2026 growth of virtual reality Indian DCs expected to be
to 1,471 MW applications with gain pace from 2024
USD 4.4 bn high data consumption
investments opportunity
3
Delhi NCR
Key trends
Kolkata
Mumbai
Pune
Hyderabad
Bengaluru
Chennai
4
AI led demand growth for Indian DCs expected to be gain pace from 2024
India Generative AI sector to grow at 28% CAGR from 2023-30
1
India has 1,259 AI companies which account for 4% of total AI
companies globally* US$ billion
4.5
4.2
AI will lead to multiple rise in high density server racks (5KW to 50KW) and
2 consequent cooling requirements. Colo operators will have to upgrade IT infra

that meets this needs
4.0
Immersive cooling, high density racks and network density will 3.5
3 be key differentiators to attract CSPs who will account for major

share of AI market 3.0
4
Indian Generative AI landscape had more than 60 startups of May 2023,
2.5
according to NASSCOM
2.0
Indian Generative artificial intelligence (AI) is expected to grow at
5 28% CAGR from 2023-30 which will translate into strong demand
for Data Centres
1.5
1.0 0.8
Artificial intelligence, or “AI,” is the ability for a computer to think and learn.
Use of AI is leading to a significant increase in demand for computing power 0.5
and resources to implement AI models
0.0
*Source: JLL Research, Pitchbook data, Inc., June 2023.
2023 2030
*Data has not been reviewed by PitchBook analysts.
Source: Statista Market Insights
5
Faster 5G rollout to support growth of VR applications with high data consumption
5G Base Transceiver Station (BTS)

400,000
1
Telcom players have installed 3.38 lakh BTS and 100 million 5G subscribers
reported by telecom players as of September 2023 350,000
300,000
5G subscriptions are expected to reach 700 million by the end of 2028 leading
2
250,000
to 16% CAGR growth of data usage by smartphone from 26 GB in 2022 to 62 GB
per month in 20281 200,000
5G could lead to high VR usage just as 4G led to online video streaming. VR will 150,000
3 witness extensive usage in e-commerce, social media, product designing and

virtual marketing
100,000
50,000
Source: 1Ericsson India mobility report 2023 -

Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Jul-23 Aug-23 Aug-23
Source: Department of Telecommunications
66
Data protection law compliance to open new colocation opportunities
The central government may

exempt government agencies
Responsibilities and liabilities
from the application of provisions
of data centres will have to be
Key highlights of the Bill in the interest of Implication defined while signing service-level
specified grounds such as security
of the state, public order, and for DC industry agreement with clients
prevention of offences
Individual consent is required for

The Bill covers handling of digital processing personal data for lawful Opportunity of guiding clients for
personal data in India, whether purpose. If data is used for legitimate complying with the Digital Personal Accountability of DCs with respect to
collected online or offline and uses like permits, licenses, benefits Data Protection Act may lead to data storage norms may increase
later digitised. and services by the State then consent more leasing deals
in not required
Data Protection Board will Data fiduciaries will be obligated

be established to adjudicate to maintain the accuracy,
on non-compliance with the security and erase data once its
provisions of the law purpose has been met
7
Technology and player actions to propel India DC market on new growth path
Reported industry developments
1 Nvidia & Tata group firms to deliver AI

computing infrastructure and platforms
2 Nvidia & Reliance Industries to develop
a foundational large language model
3 Reliance Industries partners with
Brookfield Infrastructure and Digital
Realty SPVs for setting up data centre
for developing AI (LLM) for generative AI applications
across the country
4 Reliance industries plans to create up

to 2000 MW of AI-ready computing
capacity, across both Cloud and Edge
5 Digital Personal Data Protection
(DPDP) Bill was passed by the
6 ChatGPt launched in November 2022
has led the start of AI tools and has
locations as per latest announcement Parliament in August 2023 witnessed sharp growth in 2023
in their Annual General Meeting
7 Rollout of 5G across India has been

implemented before schedule by
8 Vi Business, Vodafone Idea’s enterprise
arm, has partnered with Yotta Data
Services for data center colocation and
9 Chennai witnessed new MIST cable
landing with 200 terabytes bandwidth
leading telecom players in 2023
cloud services offerings
Source : Media reports and press releases
8
Lowest vacancy rate of 6.7% as demand exceeds supply during H1 2023

User demand H1 2023 - Industry size
50% Hyperscale
20% BFSI
Delhi NCR
11% Technology IT Load Live

6% Telecome 778 MW
Kolkata
5% Retail & E-commerce
Mumbai
4% Other Pune Hyderabad
2% Entertainment & Media

IT Load occupied Bengaluru
2% Healthcare Chennai
1% Energy 726 MW
H1 2023 Review
Supply Absorption 6.7% 693 MW

57 MW 66 MW Vacancy Supply expected
34% Decline y-o-y 26% Decline y-o-y during H2 2023-2026
Supply algins with Moderation in CSP offtake
absorption trends impacts absorption
9
Demand and supply growth stabilises post pandemic driven usage in 2022
Absorption stabilises at 66 MW during H1 2023 Lower supply addition at 57 MW led to reduced vacancy levels
• Absorption was 26% lower than H1 2022 as Hyperscale Cloud Service Providers • Industry added 57 MW during H1 2023, which is 34% lower than 86 MW
(CSP), the key segment for DC demand witnessed a breather in growth as added in the same period last year
compared to 2022
• Supply addition was rationalized to clear existing inventory leading to
• Mumbai at 37.6 MW accounted for 57% share of total absorption during the lower vacancy levels
first half of 2023
65.9 MW absorption during H1 2023 – 26% y-o-y decline 34% y-o-y decline in supply at 56.8 MW during H1 2023
MW MW
100.0 100.0
89.1 86.0
80.0 80.0
65.9 61.4 56.8
60.0 58.3 60.0
36.6
40.0 37.6 40.0
20.0 10.1 20.0 10.0 6.04.0 9.0 7.6

7.8 8.7 7.4 6.2 0.7 0.4 1.6 1.0 3.2 2.4
2.5 4.1 5.0 2.0 3.8 0.4 0.04 0.0
0.0 0.0
Pune
Bengaluru
Hyderabad
NCR-Delhi
Chennai
All India
Mumbai
Other Cities
Kolkata
Bengaluru
Hyderabad
Pune
NCR-Delhi
Chennai
All India
Mumbai
H1 2022 H1 2023 H1 2022 H1 2023
Source: JLL Research Source: JLL Research
10
Industry to grow at 20% CAGR in the next 3.5 years with 693 MW capacity
addition
2024 to witness highest capacity addition of 227MW Mumbai and Chennai to account for 77% of new capacity additions
MW MW
250 227 250
205
200 200
172
150
150
89 100
100
50
50
-
0 H2 23 2024 2025 2026
H2 2023 2024 2025 2026 Mumbai Chennai Delhi NCR Pune
Kolkata Bengaluru Hyderabad Gift city
Note: *Investments include real state and DC IT Infrastructure
2x growth in industry capacity to USD 4.4 bn investments* are expected for DC 8.8 mn sq. ft. real estate demand
1,471 MW by YE 2026 capacity additions by 2025 expected in linewith supply additions
11
USD 4.4 billion investments expected in DC industry by 2026
• Supply addition of 693 MW expected based on pre-commitment • USD 4.4 capital investment outlay is expected for 693 MW supply additions by 2026
deliveries till 2026
• Mumbai with 49% share would drive the investments followed by Chennai (30%)
• Key DC regions- Mumbai and Chennai will need real estate space of and Delhi NCR at 11%
4.5 & 2.7 mn sq ft respectively. Emerging DC hubs like Hyderabad and
NCR will need 0.6 & 0.3 mn sq ft by 2026
Mumbai to account for 51% of real estate demand USD 4.4 bn capex expected by 2026
Mn sq ft 2.2 Mumbai
5.0 4.5
4.5 1.3 Chennai
4.0
3.5 0.5 NCR
3.0 2.7
0.1 Hyderabad
2.5
2.0 0.2 Pune
1.5
0.1 Bengaluru
1.0 0.6
0.3 0.4
0.5 0.1 0.2 0.09 0.1 Kolkata
0.0
Mumbai Chennai NCR Hyderabad Pune Bengaluru Kolkata Others 0.04 Others
12
Delhi NCR
Citywise trends
Kolkata
Mumbai
Pune
Hyderabad
Bengaluru
Chennai
13
Mumbai
Colo capacity Total assets Cable landing Market overview
392 MW 30 9 Supply
• 37 MW accounting for 67% of total supply was delivered during H1 2023
• Trend of colo operators acquiring land parcels adjacent to existing facility

User demand share in % has been witnessed
15% BFSI
1% Energy
Demand
2% Entertainment & Media • Delivery of pre-committed space led to 38 MW absorption during H1 2023
2% Healthcare • BFSI and Media sectors are actively migrating to colocation space
61% Hyperscale
3% Other
Market trends
5% Retail & E-commerce • DPDP Act and related compliance to open colocation opportunities
7% Technology • City has been fully covered under 5G with one of the telecom operator
registering 2 mn subscribers as of May 2023
4% Telecom
14
Supply mn.s.f MW Supply forecast

MW
Total inventory 7.1 392
150
Total vacant 0.3 14
104
Under construction (H2 2023-26) 5.6 313
100 80
Planned (2027-28) 1.7 94 69
60
50
Demand MW
Net absorption 37.6 -

H2 2023 2024 2025 2026
Note: Supply forecast does not include hyperscale self-build supply
Monthly recurring charges Low High
Sub 250 kw 8,250 11,250
250 kw - 1 MW 7,500 9,375
1- 5 MW 6,750 7,875
5 MW plus 6,375 7,500
Note: The above mentioned numbers are based on INR/ KW/Month

basis available market data on likely achievable rates. The above pricing
assumes standard racks between 5kVA - 6.5kVA without any customization.
Source: JLL Research
15
Chennai
87 MW 9 5 Supply
• Chennai witnessed brownfield supply addition in H1 2023 in line
with demand trends
User demand share in %
• Supply is expected to ramp up to meet hyperscale deliveries in
next three years
18% BFSI
1% Energy Demand
• 2.5 MW absorption during H1 2023 was from enterprises in ecommerce
2% Entertainment & Media
and fintech space
1% Healthcare • New cable landing to spur increased pre-commitments from CSPs
55% Hyperscale
4% Other Market trends

• The landing of new MIST subsea cable in Chennai is expected to attract demand
3% Retail & E-commerce
from APAC region
13% Technology • AdaniConnex is reported to have raised US$ 213 mn to build one its DC in the city
16

MW
Total inventory 1.7 87
80
65 67
Total vacant 0.1 6 63
4.3 221 60
Under construction (H2 2023-26)
Planned (2027-28) 1.2 64

40
26
20
Demand MW

H2 2023 2024 2025 2026
Sub 250 kw 8,250 9,000
250 kw - 1 MW 7,875 8,625
1- 5 MW 7,125 7,875
5 MW plus 6,375 6,750
Note: The above mentioned numbers are based on INR/ KW/Month basis available
market data on likely achievable rates. The above pricing assumes standard racks
between 5kVA - 6.5kVA without any customization.
17
Hyderabad
47 MW 5 Nil Supply
• Brownfield expansion of 3MW by colo operator was added during H1 2023
• Hitech city region is expected to witness limited supply due to high land cost and
User demand share in % availability of right sized land parcel
55% BFSI
0% Energy
Demand
0% Entertainment & Media • Absorption of 6 MW from CSPs and 1.4 MW from enterprises
contracted during H1 2023
4% Healthcare
• Initial trend of shift from public to private cloud demand has been observed
5% Hyperscale
6% Other
Market trends
0% Retail & E-commerce • Self-build CSPs are expected to become operational in phases
18% Technology
12% Telecom
18
1.0 47 MW
Total inventory
10
10
Total vacant 0.1 3
0.2 10 8
Under construction (H2 2023-26)
Planned (2027-28) 0.5 24 6
Demand MW 2
Net absorption 7.4 0

2026
Sub 250 kw 7,875 9,375
250 kw - 1 MW 7,350 8,250
1- 5 MW 6,600 7,500
5 MW plus 6,375 7,125
19
Delhi NCR
79 MW 14 Nil Supply
• Supply growth has been slower as some projects are under construction
• Incentives provided by UP state government has led to increasing commitments

User demand share in % by colo players
14% BFSI
1% Energy
Demand
3% Entertainment & Media • H1 2023 witnessed 4MW absorption from enterprise clients
1% Healthcare • Pre-commitments from CSPs are expected to grow further
47% Hyperscale
8% Other
Market trends
6% Retail & E-commerce • Central government digital initiatives and sovereign cloud concept to drive
demand for the DC players
10% Technology
• More operators are expected to do land banking to meet potential demand
10% Telecom
20
Supply forecast
Supply mn.s.f MW
Total inventory 1.4 79 MW

60 55
Total vacant 0.2 13

40 30
Planned (2027-28) 1.2 77
20
Demand MW
3.8
-
Net absorption
H2 2023 2024 2025 2026
Sub 250 kw 7,875 9,375
250 kw - 1 MW 7,350 8,250
1- 5 MW 6,600 7,500
5 MW plus 6,375 7,125
21
Bengaluru
76 MW 13 Nil Supply
• Delivery of pre-commitments led to 9MW of supply addition during H1 2023
User demand share in % • New DC builds are expected to attract occupier with higher compute requirements
36% BFSI
0% Energy
Demand
0% Entertainment & Media • Demand from generative AI and startups to pick up pace
2% Healthcare • Technology, fintech and e-commerce continued to drive demand
0% Hyperscale
4% Other
Market trends
1% Retail & E-commerce • Colo operators are likely to explore new regions to address power and
land availability
51% Technology
6% Telecom
22

MW
Total inventory 2 76
15
Total vacant 0.2 8
10
Under construction (H2 2023-26) 0.3 12 10
Planned (2027-28) 0.9 40
5
2
Demand MW
-
Net absorption 10.1 H2 2023 2024
Sub 250 kw 7,500 9,000
250 kw - 1 MW 7,350 8,625
1- 5 MW 7,125 7,875
5 MW plus 6,525 6,750
23
Pune
81 MW 6 Nil Supply
• Prominent colo players continue to expand facilities to meet CSP requirement
• Colo players are providing Build-to-Suit (BTS) / powered shell options for
User demand share in % hyperscalers to establish new availability zones (AZ)
11% BFSI
1% Energy
Demand
1% Entertainment & Media • CSP pre-committed delivery led to 4MW absorption during H1 2023
1% Healthcare • Enterprise demand from tech startups expected to pick up
64% Hyperscale
4% Other
Market trends
6% Retail & E-commerce • New land acquisition in line with AZ strategy and power availability to influence
the market growth
11% Technology
1% Telecom
24
1.1 81 MW
Total inventory
0.02 1 16 15
Total vacant
14
Under construction (H2 2023-26) 0.3 25 12
10
0.3 20 10
Planned (2027-28)
8
6
4
Demand MW
2
2024 2026
Sub 250 kw 7,125 8,250
250 kw - 1 MW 6,600 7,875
1- 5 MW 6,375 7,125
5 MW plus 6,000 6,375
25
Kolkata
Supply forecast
6 MW 3 Nil Supply
• Leading colo operators have started construction of DC facilities
• Supply is expected to be in phased out in line with demand trends
Demand
• CSPs took up additional space to increase coverage during H1 2023
• BFSI and IT sector expected to create demand from 2025 onwards as the Silicon
and Fintech hub becomes operational
Market trends
• Most colo players have adopted land banking to address regional demand
26
Supply forecast
Supply mn.s.f MW
Total inventory 0.11 6 MW

12
Total vacant 0.1 10
10 9
8
Planned (2027-28) 0.63 32
6
4
2 1
Demand MW -
Net absorption 0.4 H2 2023 2024 2025
Sub 250 kw 8,250 9,750
250 kw - 1 MW 7,500 8,250
27
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Business Enquiries Research Enquiries About JLL
Rachit Mohan Dr. Samantak Das For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment
APAC Lead - Data Centre Chief Economist and management company, has helped clients buy, build, occupy, manage and invest in a variety
Leasing and India Lead Head Research & REIS
of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with
Data Centre Transactions India
India samantak.das@jll.com
annual revenue of $20.9 billion and operations in over 80 countries around the world, our more
rachit.mohan@jll.com than 105,000 employees bring the power of a global platform combined with local expertise.
Author Driven by our purpose to shape the future of real estate for a better world, we help our clients,
Benjamin Isaac people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered
India lead - Data Centre Jitesh Karlekar trademark, of Jones Lang LaSalle Incorporated.
Capital markets Director Research
India For further information, visit jll.com
Data Centre (APAC)
benjamin.isaac@jll.com India
jitesh.karlekar@jll.com
Zainab Lakdawalla
India Lead - Colocation
Leasing, Data Centre Advisory
India
zainab.lakdawalla@jll.com
This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on
sources we believe to be reliable, but we have not independently verified those sources and we do not guarantee that the information in the report is accurate or complete. Any views expressed in the report
reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be
materially different from those implied by such forward-looking statements. Advice we give to clients in particular situations may differ from the views expressed in this report. No investment or other business
decisions should be made based solely on the views expressed in this report.
Copyright © Jones Lang Lasalle IP, Inc. 2023

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Research

Data Centre Update

Powering the new phase of AI growth

2 consequent cooling requirements. Colo operators will have to upgrade IT infra

3 be key differentiators to attract CSPs who will account for major

Faster 5G rollout to support growth of VR applications with high data consumption

5G Base Transceiver Station (BTS)

3 witness extensive usage in e-commerce, social media, product designing and

Source: 1Ericsson India mobility report 2023 -

Source: Department of Telecommunications

Data protection law compliance to open new colocation opportunities

The central government may

Individual consent is required for

Data Protection Board will Data fiduciaries will be obligated

1 Nvidia & Tata group firms to deliver AI

4 Reliance industries plans to create up

7 Rollout of 5G across India has been

Source : Media reports and press releases

Lowest vacancy rate of 6.7% as demand exceeds supply during H1 2023

11% Technology IT Load Live

2% Entertainment & Media

Supply Absorption 6.7% 693 MW

20.0 10.1 20.0 10.0 6.04.0 9.0 7.6

H1 2022 H1 2023 H1 2022 H1 2023

Source: JLL Research Source: JLL Research

USD 4.4 billion investments expected in DC industry by 2026

Source: JLL Research Source: JLL Research

Colo capacity Total assets Cable landing Market overview

• Trend of colo operators acquiring land parcels adjacent to existing facility

Supply mn.s.f MW Supply forecast

Net absorption 37.6 -

Sub 250 kw 8,250 11,250

250 kw - 1 MW 7,500 9,375

5 MW plus 6,375 7,500

Note: The above mentioned numbers are based on INR/ KW/Month

Source: JLL Research

Colo capacity Total assets Cable landing Market overview

4% Other Market trends

Supply mn.s.f MW Supply forecast

Planned (2027-28) 1.2 64

Net absorption 2.5 -

Monthly recurring charges Low High

Sub 250 kw 8,250 9,000

250 kw - 1 MW 7,875 8,625

5 MW plus 6,375 6,750

Source: JLL Research

Colo capacity Total assets Cable landing Market overview

Supply mn.s.f MW Supply forecast

Planned (2027-28) 0.5 24 6

Net absorption 7.4 0

Monthly recurring charges Low High

Sub 250 kw 7,875 9,375

250 kw - 1 MW 7,350 8,250

5 MW plus 6,375 7,125

Source: JLL Research

Colo capacity Total assets Cable landing Market overview

• Incentives provided by UP state government has led to increasing commitments

1% Healthcare • Pre-commitments from CSPs are expected to grow further

Total inventory 1.4 79 MW

Under construction (H2 2023-26) 1.5 85

Monthly recurring charges Low High

Sub 250 kw 7,875 9,375

250 kw - 1 MW 7,350 8,250