PDG has acquired land for setting up 72 MW data center in northern Chennai Metropolitan Area

• The demand for data centre space in Chennai is primarily driven by hyperscalers, cloud service providers (CSPs), and the BFSI sector. Emerging tier 2 CSPs are looking for space in the DC hubs.
• The BFSI sector continues to show interest, with Indian banks setting by Disaster recovery sites. Additionally, there’s growing demand from Global Capability Centres (GCCs) and R&D companies, with requirements ranging from 500 kilowatts to 2MW.

Submarine cable SEA-ME-WE 6 (Southeast Asia-Middle East-West Europe-6) has landed in Chennai

• Chennai’s data centre market has seen significant supply growth in anticipation of pre-commitments from hyperscale CSPs. The bunching of supply is expected to lead to short term demand supply disparity, which is expected to get balanced out in 2025.
• Major players have adopted land banking strategy for building hyperscale DCs.

Colt DC and RMZ, a real estate developer formed a joint venture to develop data centre across leading cities like Chennai

• There’s a growing trend of GPU adoption for AI workloads in the Chennai market. While some SaaS (Software as a service) players are beginning to explore GPU capabilities, the overall workload impact on data centres in Chennai is still limited.
• Cloud service providers are offering GPU-as-a-service to their existing customers. Some enterprises are purchasing GPUs and co-locating them with service providers.

Outlook

• For Users
  •Increased bandwidth and low latency to benefit CSPs.
  •Lease rentals to remain competitive amidst many options.
  •New AI workload options to emerge for enterprise client soon.
• For Providers
  •Other hyperscale might explore AZ options soon.
  •Supply needs to be aligned with pre-commitments.
  •Demand from GCCs to increase as faster pace.