Ascendas Property Fund Trustee Pte. Ltd., the Trustee-Manager of Ascendas India Trust (a-iTrust) plans to invest around INR 1200 crore ($216.6 million) to extend and function phase one of its first data centre campus on a prime site in India.

It will be one of the largest data centre campuses in Airoli, a growing data centre hub in Navi Mumbai. The 6.6-acre greenfield site will be developed in phases into a fully-fitted data centre campus with a total potential built-up area of up to 575,000 square feet and 90 megawatts of power catering yo global technology giants and cloud service providers, as well as large domestic enterprise clients.

Sanjeev Dasgupta, Chief Executive Officer of the Trustee-Manager of Ascendas India Trust, states, “Our entry into the data center sector in India will diversify a-trust's portfolio into an attractive and highly scalable asset class. India has the second fastest-growing digital economy in the world. The large market size combined with the increasing trends towards data localization validates our market entry strategy. Developing our first data centre campus with support from our sponsor, CapitaLand, will allow us to leverage the CapitaLand Group’s data center expertise and gives us complete control over the design and quality of the data centre. We look to improve our portfolio resilience through diversification into new economies asset classes such as data centres and life sciences. As we grow further, we will continue to be prudent in our capital management and nimble in seizing investment opportunities, to maximize unitholders’ returns.”

The acquisition of the site from third-party vendors is expected to be completed by the third quarter of 2021. The data centre campus will comprise two buildings. In phase one, the first building, which is scheduled to be ready by 2Q 2024, will have a built-up area of about 325,000 sqft.

“India’s rising data consumption and demand for quality solutions present a good opportunity for CapitaLand’s entry into the country’s burgeoning data centre market. We are acquiring the site for the development of our first data centre in India following the recent acquisition of our first hyper-scale data center in China, one of the largest data centre markets in the world. We are stepping up our growth in data centres and accelerating the expansion of the Group’s portfolio into new economy asset classes. With this new development in India, the Group’s investment in data centres this year has amounted to about S$1.7 billion. We will continue to build and leverage our expertise in data centre design, development, and operations across the regions. We look forward to working with our capital and business partners to expand our data centre portfolio in our core markets,” said, He Jihong, Chief Executive Officer, Data Centre, and Chief Corporate Strategy Officer, CapitaLand Group.”

JLL, said, “As the data center landscape continues to evolve, the industry is expected to grow exponentially to reach 1,007 MW by 2023 from its existing capacity of 447 MW. With the growing reliance on digital connectivity, demand is likely to ramp up further due to the imminent rollout of 5G rollout, IoT-linked devices, data localization, and cloud adoption.”

India’s data center sector will require an investment of $3.7 billion over the next three years to fulfill the 6 million sq. ft greenfield development opportunity for the industry.

According to JLL, India’s colocation data center industry witnessed unprecedented absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America.

India’s data center industry is expected to add 560 MW during 2021-23 leading to a real estate requirement of 6 million sq ft. Mumbai and Chennai are expected to drive 73 percent of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi-NCR emerging as new hotspots, said JLL.