In India, the infrastructure and services for data centers have experienced significant growth in recent years, with developers seeking to capitalize on the expansion of the data center business. This trend has been driving up the demand for real estate throughout the nation.
Data centers are buildings that house servers, storage systems, and networking equipment, providing a secure and reliable environment for data management, processing, and storage. With the rise of cloud computing, AI, and the Internet of Things (IoT), the volume of data being produced and stored has increased exponentially, making data centers in high demand.
According to research by JLL India, the data center market in India is expected to reach $4.5 billion by 2025, growing at a compound annual growth rate (CAGR) of 22% from 2020 to 2025. The primary drivers of this growth are the demand for data storage and processing capabilities, as well as the increasing popularity of e-commerce.
As the data center business continues to expand, the demand for real estate is also on the rise. Reliable power sources, spacious areas, and robust communication infrastructure are all essential requirements for data centers, leading to an increased need for data center facilities in areas with favorable characteristics, such as dependable power supply, strong connectivity, and ease of access.
To meet this growing demand, developers are investing in building data center infrastructure. Many real estate companies in India now offer built-to-suit solutions for data center clients, constructing facilities based on each client’s specific requirements. This approach has gained popularity in India, with companies like the Adani Group, the Hiranandani Group, and Yotta Infrastructure Solutions investing in data center infrastructure development.
The expansion of the data center industry is also benefiting the real estate market as a whole. In previously undeveloped areas, the construction of data centers is driving the development of roads, power supplies, and telecommunications networks, creating new opportunities for developers to fund new projects and spur growth in these regions.
Furthermore, the growth of the data center sector is contributing to the economy and creating job opportunities. Data center development requires specialized knowledge and labor, leading to new opportunities in the building and real estate industries. Additionally, data center management requires experts in fields like IT, engineering, and security, creating new job opportunities in these industries as well.
However, the expansion of the data center sector presents challenges as well. Developers may face hurdles entering the market due to the significant technological and infrastructural investments required for building data centers. Moreover, data centers’ high power requirements may lead to increased electricity consumption, putting a strain on the power system and potentially increasing energy prices.
Despite these challenges, the demand for real estate in India is expected to continue growing as the data center sector expands. The emergence of cloud computing, the internet of things, and artificial intelligence is predicted to drive up demand for data center infrastructure and services.
The rise of the data center business in India is boosting demand for real estate as developers invest in building facilities to meet client demands. The proliferation of data centers is also opening up previously undeveloped regions for investment and growth in the real estate market. While the expansion of the data center sector may present challenges, the trend is expected to continue, driving demand for real estate and creating opportunities for economic expansion and job growth.
Vietnam’s low land prices have contributed to its ranking among the top markets for data centers
The Vietnam data center market is expected to attract investments of USD 1,037 million by 2028, with a compound annual growth rate (CAGR) of 10.68%. Vietnam is witnessing an increase in cloud adoption across various industry verticals, including government agencies, enterprises, and education sectors.
According to Cushman & Wakefield, while most of the largest markets in Asia Pacific (APAC) are under particularly high pressure of rising land prices, only Ho Chi Minh City is among the top 10 most affordable places to develop data centers. One notable advantage that data centers have in competition for these sites is the limited impact on surrounding traffic and parking availability, a key area of concern for a number of local communities. However, data centers do require a higher power draw, and there have seen greater local community concerns about the potential effect on electrical grids. The growth of edge data centers has continued, optimizing workload for latency.
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