RMZ Corporation, a Bengaluru-based real estate firm, announced a significant joint venture with British company Colt Data Centre Services on November 19.
The partnership marks RMZ’s entry into the data centre sector, with a planned investment of $1.7 billion, a mix of debt and equity.
As reported by Money control, the two companies will develop three data centres as part of the deal, with two currently under construction in Navi Mumbai and Chennai. The location for the third data centre is yet to be finalized, but Pune and Hyderabad are among the potential cities under consideration, said Quy Nguyen, Chief Sales Officer of Colt Data Centre Services.
The Navi Mumbai centre will have a capacity of 134 megawatts (MW), and the Chennai facility will offer 80 MW of capacity. The three data centres, once operational, are expected to have a combined capacity of 250 MW within the next three to five years, Nguyen added.
Deepak Chhabria, CEO of RMZ Infrastructure, highlighted that the joint venture may also explore acquisitions as a means of expanding rapidly in the data centre market.
Despite concerns over the high levels of power consumption associated with data centres, most states in India are welcoming these investments, as they create high-paying jobs and contribute to the local economy. Chhabria emphasized that power availability is adequate in most states for such developments.
Nguyen noted that the data centre market in India is as competitive as Colt’s key markets in Western Europe, with rental prices in India roughly half those of Colt’s European facilities. While the risk of oversupply exists in the sector, Nguyen remains optimistic due to the increasing demand driven by artificial intelligence (AI) and data hyperscalers.
“Hyperscalers typically build around 50 percent of their required capacity, partnering with other firms for the remainder. They tend to buy capacity in waves,” said Nguyen. “Without the focus on AI, the risk of oversupply would be concerning, but with AI-driven enterprise growth, there is sufficient demand to sustain the market.”
The Indian data centre market is forecast to reach nearly $11 billion by 2027, growing at a compounded annual growth rate (CAGR) of 15 percent, according to CBRE. The market growth has largely been fueled by the increasing needs of hyperscalers, which include large-scale cloud and data providers like Amazon Web Services and Google Cloud. Additionally, third-party operators are capitalizing on the opportunities in AI and data localisation, prompting many Indian real estate firms to enter the sector.
The venture between RMZ and Colt is seen as a strategic move to tap into India’s expanding data centre market, as the demand for cloud infrastructure and data services continues to rise, especially with the adoption of AI technologies.