New Delhi, Aug 3: India's rapidly expanding data center ecosystem is set to become a significant driver of residential real estate demand in the coming years, according to a new report by proptech company Square Yards.
According to the report, India's proposed data centre pipeline of approximately 9,030 MW has the potential to generate nearly 4.33 lakh ecosystem jobs, translating into an estimated 195 million square foot of residential space demand by 2030.
The research report by the Gurugram-headquartered company that recently achieved a unicorn status after receiving over Dollar 95 million in fresh funding highlights that, unlike traditional commercial developments, data centres create value by attracting investments in power infrastructure, fiber connectivity, logistics, commercial establishments and supporting services, gradually transforming surrounding regions into thriving urban ecosystems.
While data centres are often viewed purely as digital infrastructure assets, the report reveals that their long-term impact extends well beyond technology, acting as catalysts for housing demand, infrastructure investment and urban expansion across emerging growth corridors.
India currently generates nearly 20% of the world's digital data but accounts for only 4% of global data centre capacity, indicating substantial headroom for infrastructure expansion. With artificial intelligence, cloud computing, and enterprise digitisation accelerating investments, India's installed data centre capacity is expected to grow significantly over the coming years, bringing with it a new wave of infrastructure-led real estate development.
Commenting on the findings, Vivek Agarwal, Co-Founder and Chief Technology Officer, Square Yards, said:
"For decades, India's real estate growth has been shaped by highways, industrial corridors, airports and IT parks. Data centers represent the next evolution of that story. While these facilities themselves employ relatively few people, they attract the critical infrastructure that enables long-term urban development. Investments in power, fiber connectivity and logistics create confidence for businesses, developers and institutions, eventually driving residential and commercial growth around these emerging digital corridors. We believe data centers will increasingly serve as infrastructure anchors that redefine how cities expand in the coming years."
The golden ring to see the biggest impact
The report notes that the strongest residential impact is unlikely to emerge within the data centre campuses themselves. Instead, it identifies a 5-15 km 'Golden Ring' surrounding major facilities whereinfrastructure upgrades, mixed-use developments, residential townships, retail centers and civic amenities are expected to flourish. As these supporting ecosystems mature, they create sustained housing demand driven by ancillary employment and economic activity rather than direct workforce concentration.
Among the major beneficiaries, Maharashtra is projected to generate over 54 million sqft of residential demand, followed by Karnataka with nearly 28 million sqft, Andhra Pradesh with over 23 million sqft, Uttar Pradesh with approximately 22.7 million sqft, Telangana with 21.6 million sqft and Tamil Nadu with 19.4 million sqft. These markets are expected to witness increasing residential activity as digital infrastructure investments accelerate alongside improvements in transport, utilities and commercial ecosystems.
While stating that India's next real estate growth cycle may be shaped increasingly by digital infrastructure, the report concludes emerging destinations, including Visakhapatnam, Noida, GIFT City and other infrastructure-rich locations, are expected to benefit from sustained economic activity, improved connectivity and long-term institutional investment. In this evolving landscape, data centres are emerging not merely as technology assets, but as foundational infrastructure capable of reshaping land values, urban expansion and housing demand across India, it adds.
Sharing insights from the research, Sunita Mishra, Vice President – Research & Insights, Square Yards, said:
“Housing demand continuously chases areas that offer huge employment potential. Little wonder then that data centres in India are set to not only drive but shape the future of residential developments across the country.
This growth will not be restricted to mega cities only. We expect Tier-2 and Tier-3 cities to benefit from this grand opportunity equally.”
