Ascendas India Trust (a-iTrust), which is managed by CapitaLand, one of Asia’s largest real estate firms, today announced that it will invest in and develop a greenfield data center project located on an ~6.6-acre site in Airoli, Navi Mumbai, India. Specifically, Ascendas India Trust is acquiring, from third-party vendors, Suresh Wavia and Jayesh Vavia, 100% of Datascape Realty Private Limited, an Indian SPV, which in turn holds a leasehold interest on the land for which the project will be constructed.

For the initial site acquisition, Ascendas India Trust is incurring total costs of $19.2m (1.43bn Indian Rupees). Specifically, this is comprised of $17.6m (1.31bn Indian Rupees) of purchase consideration and $1.7m (123.5m Indian Rupees) in transaction costs. Notably, this acquisition marks Ascendas India Trust’s first investment in data center projects in India.

Finally, the acquisition of the site will close by Q3 2021.

Development Site and Plan – Airoli, Navi Mumbai, India

Location

Ascendas India Trust’s site in Airoli, Navi Mumbai, India is located along Thane-Belapur Road and is a significant IT micro-market. Importantly, the location is easily accessible from the city of Mumbai via the Eastern Express Highway.

Ascendas India Trust Navi Mumbai Location

Total Project

Development of the site will be carried out in two phases to build-out two fully-fitted data center buildings. Upon completion, Ascendas India Trust’s Navi Mumbai campus will comprise a total area of up to 575k sqft and 90 megawatts of power capacity (i.e., sanctioned power supply).

Overall, this data center campus will have capacity to host ~8.5k racks. Also, in terms of energy use, the facilities will operate at a power usage effectiveness (PUE) ratio of ~1.4.

Power is available from three substations in close proximity to the site. Additionally, multiple fiber routes exist to connect into the data center campus.

Phase 1

Phase 1 of the Navi Mumbai site will comprise one data center building with 325k sqft of area and 26 megawatts of power capacity. This building will offer 4.3k racks, with IT loads of 4.5 kilowatts to 7.5 kilowatts per rack.

Development of Phase 1 will cost $161m (12bn Indian Rupees), financed through a combination of debt and equity. Finally, completion of Phase 1 will occur by Q2 2024.

Land Tenure

The owner of the site’s freehold interest on the land is Maharashtra Industrial Development Corporation (MIDC). Notably, the leasehold interest has ~41 years of remaining term and is subject to renewal for an additional 95 years, upon expiry of the primary lease term.

Customers

Ascendas India Trust will target customers including global technology companies, cloud service providers, and large domestic enterprises for its campus.

Competitors – India and Navi Mumbai

Ascendas India Trust notes that India’s data center sector has received significant investment from international operators such as NTT and Equinix, and Indian corporates such as Reliance Jio, Adani, and Hiranandani. In particular, the Navi Mumbai sub-market has a presence from data center operators including Sify, CtrlS, Colt DCS, and Bridge.

Ascendas Navi Mumbai Property Situation

India – Data Center Market

Demand for data centers in India is rising due to its large and growing user base of data consumers. Increasing internet penetration, smart phone usage, and more bandwidth-intensive usage, such as video conferencing and streaming services, is fueling this growth.

Additionally, the Indian Government is pushing forward data localization and digital payments. In turn, these changes will increase data center demand from technology, financial, media and healthcare companies.

As a result, India’s data center power capacity will expand by a compound annual growth rate (CAGR) of 31% between 2020 and 2023, from 447 megawatts to 1,007 megawatts.

Mumbai – Market

Mumbai is India’s largest data center co-location market with 199 megawatts of power capacity, equivalent to 44% of the country’s data center capacity. Notably, Mumbai’s capacity will grow by 330 megawatts, to 529 megawatts by 2023, equivalent to a 39% CAGR.

Key characteristics of Mumbai’s data center market include strong subsea cable connectivity, low earthquake risk, and a stable geopolitical environment. Demand for Mumbai’s data center capacity is coming from cloud service providers and technology companies serving financial institutions.

Navi Mumbai – Sub-Market

Navi Mumbai, a township of Mumbai, is an attractive data center sub-market. Particularly, given its proximity to subsea cable landing stations, abundant & scalable power, large land parcels with clear title, existing infrastructure, and carrier-neutral network connectivity.

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