by SKJ Landbase 
India REITs and data centres are increasingly coming together at the intersection of real estate, technology and digital infrastructure. India’s listed REIT market has historically been dominated by office assets, but the rapid growth of cloud computing and artificial intelligence is creating demand for specialised properties where power, cooling, fibre connectivity and computing capacity are as important as location and floor area.
A recent Hindustan Times report highlights how data centres are beginning to find a place within India’s evolving REIT landscape. The shift is significant because data centres operate differently from conventional office buildings: their economics depend not only on leasing but also on power availability, cooling infrastructure, technology requirements, customer concentration and substantial capital expenditure. Hindustan Times
What Are India REITs and Why Are Data Centres Important?
A Real Estate Investment Trust (REIT) allows investors to participate in income-generating real estate through a listed or otherwise structured investment vehicle.
India’s REIT market initially developed largely around commercial office properties because large office portfolios offered characteristics that suited institutional ownership, including established tenants, long leases and recurring rental income.
Data centres introduce a different type of real estate asset.
A data centre may physically be a building, but its ability to generate income depends on a much wider infrastructure ecosystem:
- Reliable electricity
- High-capacity fibre connectivity
- Advanced cooling systems
- High computing density
- Network connectivity
- Physical security
- Backup power
- Operational resilience
- Suitable land and location
The growth of cloud computing and AI is increasing the importance of these requirements. Hindustan Times
India REITs and Data Centres: A Growing Connection
The connection between India REITs and data centres is becoming more relevant as India’s digital infrastructure requirements expand.
According to information provided by the Ministry of Electronics and Information Technology to Parliament in August 2026, India’s installed data-centre capacity increased from approximately 375 MW in 2020 to around 1,575 MW in 2026. JLL, using a broader market assessment, estimated India’s data-centre capacity at approximately 1.6 GW by mid-2026 and projected it could reach 6 GW by 2029. Hindustan Times
JLL also reported 101 MW of data-centre absorption during the first half of 2026, more than 20% above the average H1 absorption recorded over the preceding three years. Hyperscale pre-commitments accounted for 82% of that absorption. Hindustan Times
These figures help explain why institutional investors and real estate owners are paying greater attention to the sector.
AI Is Accelerating India’s Data-Centre Requirement
Cloud computing was already driving demand for data centres before generative AI became mainstream.
AI is now adding another layer of demand.
Training and operating large AI models requires high-density computing infrastructure, which in turn requires significant amounts of electricity and sophisticated cooling.
The scale of India’s AI infrastructure is already expanding. The IndiaAI Mission’s shared compute capacity had crossed 45,000 GPUs by June 2026, while 237 projects had used 93.18 lakh GPU hours of subsidised computing capacity by August, according to the HT report. Hindustan Times
CRISIL Ratings has identified public-cloud adoption, AI investment and 5G-enabled applications requiring low latency as important demand drivers. It expects revenue among the third-party data-centre operators it tracks to grow by approximately 20–22% annually to around ₹20,000 crore by fiscal 2028. Hindustan Times
India’s Data-Centre Market Is Expanding Beyond Traditional Real Estate
Data centres demonstrate how the definition of commercial real estate is changing.
Traditional office buildings are primarily evaluated through factors such as:
- Location
- Floor area
- Tenant quality
- Rental income
- Occupancy
- Lease duration
Data centres require an additional layer of analysis.
Power
A data centre needs substantial and reliable power infrastructure.
Cooling
High-density computing generates significant heat, requiring advanced cooling systems.
Connectivity
Fibre connectivity and network infrastructure are critical to data-centre operations.
Computing Density
The amount and type of computing equipment a facility can support affects its economics.
Customer Profile
Large hyperscalers can account for substantial capacity commitments, creating both stability and customer-concentration considerations.
This means that India REITs and data centres cannot simply be analysed using the same framework applied to conventional office assets.
Data Centres Are Already Appearing in Indian REIT Portfolios
The transition is not merely theoretical.
Mindspace Business Parks REIT provides one of the clearest examples of data-centre exposure within India’s listed REIT market.
At Mindspace Airoli West in Navi Mumbai, disclosures identify two completed data-centre buildings of approximately 0.32 million sq. ft. each. Additional data-centre buildings are under construction or identified for future development. The two completed buildings were reported as fully operational. Hindustan Times
For context, Mindspace reported approximately 46.2 million sq. ft. of total leasable area across its portfolio as of June 30, 2026. Its portfolio-level committed occupancy was 95.8% excluding specified assets and 92.1% including recently acquired Chennai properties. These figures are portfolio-level metrics and should not be interpreted as utilisation rates for the individual data-centre assets. Hindustan Times
This shows that data centres remain a relatively emerging component rather than the defining asset class of India’s listed REIT market.
India REITs and Data Centres: What Makes the Asset Class Different?
One of the most important questions for investors is whether data centres can eventually become a much larger component of Indian REIT portfolios.
The answer will depend on whether these assets can consistently demonstrate the characteristics required for institutional real estate investment.
Investors may need to examine:
Occupancy
How much of the facility is leased or committed?
Lease Structure
What is the duration and structure of customer contracts?
Development Cost
How much capital is required to build the facility?
Power Availability
Can the location support the required power load?
Cooling Infrastructure
How efficiently can the facility handle increasing computing density?
Customer Concentration
How dependent is the asset on a small number of hyperscale customers?
Pre-Commitments
How much capacity is committed before construction?
Operating Costs
How do energy and infrastructure costs affect the property’s economics?
These factors make data-centre real estate considerably more infrastructure-intensive than a conventional office asset.
The Capital Behind India’s Data-Centre Expansion
Rapid capacity growth requires significant capital.
CRISIL expects the Indian operators it tracks to incur approximately ₹55,000–65,000 crore of capex between fiscal 2026 and fiscal 2028. It expects an additional 1.1–1.3 GW of planned capacity during that period, with hyperscalers accounting for more than half of capacity tie-ups. Hindustan Times
ICRA, using a different coverage universe, estimated approximately ₹90,000 crore of investment between FY2026 and FY2028, as third-party operational capacity increases from 1,250 MW in FY2025 to around 2,400–2,500 MW by FY2028. These estimates cover different universes and therefore should not be treated as identical market forecasts. Hindustan Times
The scale of this capital requirement highlights why institutional ownership structures could become increasingly relevant.
Power Availability Could Become a Major Real Estate Factor
For conventional real estate, location is often described in terms of roads, public transport, employment centres and social infrastructure.
For data centres, power availability can be equally important.
MeitY has said existing Indian data-centre capacity accounts for less than 1% of the country’s installed power capacity, while a Central Electricity Authority estimate cited in the HT report suggests data-centre power demand could reach approximately 17 GW by 2031–32. Hindustan Times
AI-oriented facilities may require even more advanced cooling technologies, including:
- Direct-to-chip liquid cooling
- Immersion cooling
- Closed-loop liquid cooling
Therefore, future data-centre development could increasingly be influenced by the availability of land and power.
How Global Data-Centre REITs Provide Context
India is still developing its data-centre REIT ecosystem.
Globally, however, specialised digital infrastructure companies have already reached considerable scale.
Companies such as Digital Realty and Equinix demonstrate how data-centre assets can become large institutional real-estate businesses.
Digital Realty raised its 2026 development capex guidance to approximately $4.25–4.75 billion, net of partner contributions, while Equinix reported 52 projects under development across 33 markets in July 2026. Hindustan Times
These global examples provide context rather than direct forecasts for India because electricity supply, land availability, regulations, customer mix and market maturity differ substantially between countries.
India REITs and Data Centres: What Investors Should Watch
The growth story is significant, but investors should not evaluate data centres purely on capacity projections.
Several factors deserve attention.
1. Power Infrastructure
A facility can have strong demand but still face constraints if reliable power is unavailable.
2. Customer Concentration
Large hyperscalers can create significant demand, but dependence on a small number of customers can introduce concentration risk.
3. Development Capital
Data centres require substantial upfront investment compared with conventional commercial assets.
4. Cooling Requirements
AI workloads could significantly increase cooling requirements and operating costs.
5. Lease Economics
Rental income needs to be evaluated alongside the capital required to create and maintain the facility.
6. Utilisation
High demand does not automatically mean that every project will generate attractive returns on invested capital.
7. Technology Changes
Data-centre infrastructure needs to evolve as computing technologies change.
These considerations are particularly important as India REITs and data centres move closer together.
India’s REIT Market Could Become More Diversified
India’s listed REIT market has historically been office-heavy.
But data centres aren’t the only asset class creating opportunities for diversification.
Other institutional real estate categories include:
- Retail
- Warehousing
- Logistics
- Hospitality
- Healthcare
- Data centres
- Digital infrastructure
SEBI has also examined the treatment of certain infrastructure-type assets, including warehouses, hotels, data centres and hospitals, under REIT and InvIT frameworks. Its 2024 discussion document considered whether qualifying infrastructure assets could be treated as real estate/property for REIT purposes where the REIT’s role is primarily to earn fixed rental income through leasing rather than assume operating-business risk. Securities and Exchange Board of India
This distinction is important because a REIT is fundamentally an income-generating real-estate structure rather than simply a vehicle for owning any infrastructure business.
Why Data Centres Matter to the Real Estate Industry
The rise of data centres represents a broader change in real estate.
Historically, property value was strongly connected to:
Location + Land + Building + Tenants
The digital economy is adding:
Power + Connectivity + Cooling + Computing Infrastructure
This creates a new category of specialised real estate where technology infrastructure and property economics are closely connected.
For developers, institutional investors and REIT managers, this creates opportunities—but also a new set of operational and capital requirements.
What Does This Mean for India’s Real Estate Market?
The increasing focus on data centres could have wider implications for India’s property ecosystem.
Land
Large data-centre facilities require suitable land parcels with appropriate infrastructure.
Power
Power availability could increasingly influence the attractiveness of specific locations.
Infrastructure
Roads, fibre networks and electricity infrastructure become important components of site selection.
Industrial Real Estate
Data centres can create demand for specialised industrial and technology infrastructure.
Institutional Investment
Large capital requirements could encourage greater participation from institutional investors.
REITs
If assets mature into stable, income-generating properties, they could potentially broaden the universe of assets considered for REIT structures.
India REITs and Data Centres: The Road Ahead
India is still some distance away from markets where investors can access large listed REITs focused primarily on digital infrastructure.
However, the direction is becoming clearer.
India’s data-centre capacity is expanding, AI is increasing computing requirements, hyperscalers are committing capacity, and institutional investors are increasingly examining digital infrastructure as part of the broader real-estate opportunity. Hindustan Times
The next stage will depend on how these facilities perform over a longer period.
The important metrics will include:
Occupancy + Lease Stability + Power Availability + Capex + Operating Costs + Customer Concentration + Returns on Capital
This will help determine how significant data centres ultimately become within India’s REIT ecosystem.
Expert Perspective — Sanjeev Singh, MD, SKJ Landbase
“The emergence of data centres is an interesting development because it demonstrates how the definition of real estate is expanding alongside India’s digital economy. A data centre may be a physical property, but its value is closely connected with power, connectivity, technology infrastructure and long-term occupancy. For institutional real estate, the important question will be how effectively these specialised assets can combine predictable income with the substantial capital required to develop and operate them.”
— Sanjeev Singh, MD, SKJ Landbase
Final Thoughts
The story of India REITs and data centres is ultimately part of a much larger transformation in real estate.
India’s office-led REIT market is beginning to encounter asset classes connected to the digital economy. Data centres are particularly interesting because they combine real estate with power, connectivity, cooling and computing infrastructure.
The market is still developing, and current capacity forecasts should not automatically be interpreted as investment returns. But the combination of AI adoption, cloud computing, digital consumption and institutional capital is creating a new category of real-estate demand.
For India’s real estate sector, the next generation of income-producing assets may therefore extend well beyond traditional office towers.
Data centres could become an increasingly important part of that evolution—but their success within the REIT ecosystem will ultimately depend on sustainable occupancy, infrastructure availability, capital efficiency and long-term operating economics.
