RMZ Digital Infrastructure Partners (RDIP), part of real estate firm RMZ, has entered into a joint venture with Colt Data Centre Services (Colt DCS), a global hyperscale data centre operator, to jointly invest $1.7 billion to develop data centres across cities in India.
The equal partnership between RMZ and UK-headquartered Colt DCS plans to build data centres with a combined capacity of 250MW over the next 3-5 years.
Fidelity Investments-backed Colt DCS entered the Indian market in 2021, acquiring 15 acres in Airoli, Navi Mumbai and then, another 10 acres in Ambattur, in Chennai.
The investment by the joint venture will initially focus on expediting development at the existing sites in Navi Mumbai and Chennai, with an additional third site to be added in future.
India’s data centre capacity has nearly doubled since 2019, with a projected compound annual growth rate (CAGR) of 26% over the next three years, drawing a wide range of investors, Avendus Capital said in a recent report. The data centre market, which is undergoing massive disruption led by increased demand and use cases by AI customers, will pave the next wave of investments, the report said.
“We are witnessing an extraordinary shift in the data centre landscape, driven by the accelerating demands of cloud adoption and the AI revolution. The joint venture brings together Colt DCS’ track record in delivering data centre solutions along with RMZ’s expertise in development and client management,” Deepak Chhabria, CEO of RMZ Infrastructure, said in an interview.
RMZ set up the digital infrastructure vertical in early 2024 to venture into new businesses. Going forward, besides data centres, it will likely venture into other asset classes through similar partnerships.
The RMZ-Colt JV will acquire land, build data centre facilities and then lease them to clients. Chhabria added that there is strong demand for data centres across sectors such as banking, financial services and insurance (BFSI) that are data heavy.
Around 94% of the current installed data centre capacity in the country is concentrated in the top seven cities. Over the next five years, around 40% of the total additional capacity is projected to be added in Mumbai, underscoring the city’s significance in the space, the Avendus report said.
Colt DCS builds and operates hyperscale data centres across Europe, Japan and India.
“Data storage will be in huge demand in India. So, India remains a strategic country of focus for us,” Pratap Mane, president and country head – India, Colt DCS, said.
In a major deviation from global trends, hyperscalers in India are opting to build and own data centres tailored to their specifications. With artificial intelligence workloads set to surge and eventually outpace traditional cloud computing, the demand for data centres is also expected to rise sharply, the Avendus report stated.
