India's data centre market provides an opportunity of $4.9 billion investment by the year 2025, according to a JLL report.

"India's data centre capacity is expected to grow from 375 MW (megawatt) in H1 2020 to 1,078 MW by 2025, presenting a $4.9 billion investment opportunity," it said.

According to JLL's H1 2020 '(re)Imagine Data Centres: Running India's digital economy' report, the impact of data protection laws, increased shift from captive to co-location data centres and implementation of new technologies like 5G, edge computing and the internet of things (IoT) will drive sustained investor demand for this asset class over the next five years.

"India's data centre market will outperform over the next five years, supported by a combination of growing digital economy, increased investor interest and stable long-term returns," said Ramesh Nair, CEO & Country Head, India, JLL.

He was of the view that growth in the sector will be further powered by co-location sites which, through lower upfront costs, heightened data security, uninterrupted services and scalability, will, further, influence investors to re-imagine the potential of India's data centre space.

"The 703 MW expected capacity additions is translating to 9.3 million sq ft of space, which will open up greenfield investments for real estate developers and investors to fuel the future development of the sector," he added.