Alternative Investment

Digital Edge India: Digital Edge set for India foray, to buy 47-acre Thane plot for maiden data center

Singapore-based data center platform company Digital Edge is foraying in India and to set up its maiden data center in the country, it is in advanced talks to acquire a 47-acre land parcel in Thane along with realty developer Assetz Property Group for over Rs 806 crore from speciality steel manufacturer Mukand Ltd, said persons with direct knowledge of the development.

The said plot spread across Thane’s Kalwe and Dighe localities is a freehold land parcel. Mukand has already sold around 55 acres of surplus leasehold land in the same area to NTT Global Data Centers for Rs 801 crore and this transaction was completed in May 2021.

“The memorandum of understanding (MoU) for the land parcel has been signed and the transaction will be registered in the next few days. It also involves a large institutional financier,” said one of the persons mentioned above.

Backed by Stonepeak, a global alternative investment firm specializing in infrastructure and real assets, Digital Edge has in excess of $1 billion in committed capital to establish a market leading pan-Asia digital infrastructure platform.

The company provides data center and fibre services across Asia and is already present in China, Indonesia, Japan, Korea, and the Philippines. Across these five countries, the company already operates 16 data centers with a total IT load capacity of 210 MW.

ET’s email query to Digital Edge, Assetz Property Group and Mukand remained unanswered until the time of going to press.

According to JLL India, the Indian data centre industry is expected to add 681 MW capacity by the end of 2024 leading to a doubling of capacity to 1,318 MW that will need 7.8 million sq ft of real estate space. Mumbai is expected to account for 57% of the new supply followed by Chennai at 25%.
With a population of over 1.4 billion, the world’s fifth-largest economy in terms of GDP and an expanding focus on the digital delivery of services, India represents a key market opportunity to extend coverage, capacity and connectivity options for the world’s leading service providers as well as local and global enterprise customers.

India is a high-growth market, with data center demand expected to significantly increase, driven by rapidly growing data consumption, the digitization of the economy, the onset of 5G and data localisation trends.

The 5G-driven growth in Over-the-top (OTT) video streaming, online gaming, augmented reality, and digital commerce is expected to drive data usage and this would also push the growth of data centers.

Data centers in the country have already emerged as one of the most attractive growth opportunities for global investors and leading developers. Investments are flowing into the data centre segment, with multiple new markets created simultaneously, along with the rapid development of campus sizes in key cities including Mumbai and Chennai.

Global majors like Google, Microsoft and Amazon have already started setting up their hyperscale data centers in India.

This clearly indicates the rising preference for India among global data centre majors and is attributed to the data localisation norms and the government’s proposed new data centre policy aimed at simplifying the rules. The new data centre policy is also expected to provide necessary clearances and infrastructure in a time-bound manner.

Additional factors, such as the new submarine cable infrastructure linking Mumbai and Chennai to Singapore, South East Asia, Europe and the Middle East, will help position India as a more attractive Asia-Pacific location for data centre development, expansion and investment in the years to come.

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