Indian Realtor RMZ Bets $1.7B on Data Center Boom

(Bloomberg) -- Privately-held Indian developer RMZ Corporation is spending $1.7 billion in building two data centers as companies rush to develop infrastructure to capitalize on the artificial intelligence boom.

The data centers will help the Bengaluru-based real estate company diversify its business portfolio and gain from the soaring demand for data center services. “We wanted to reduce our dependencies on a single asset class and a single business,” RMZ chairman Manoj Menda said in an interview.

India’s data center industry is expected to see $5.7 billion investment by 2026 amid greater adoption of AI services across sectors, according to report by real estate broker Jones Lang LaSalle in June.

India will need to boost its data center infrastructure for it to become an influential player in the generative AI space, Siemens AG’s chief technology officer Peter Koerte said last week.

While Nvidia Corporation is partnering with Asia’s richest man Mukesh Ambani to build out AI infrastructure, billionaire Gautam Adani plans to spend $6 billion on data centers.

RMZ will build a data center each at Navi Mumbai in the western state of Maharashtra and Chennai in the southern state of Tamil Nadu. The site at Navi Mumbai is partly operational and work at the Chennai site will commence shortly, Menda said.

Related:Tracking the Explosive Growth of India’s Data Center Market

“Together this would give us about 250 MW,” Menda said. Data center capacity is measured in megawatts because of the electricity required by the computer servers housed there.

The company is also reorganizing itself into five operating businesses – three in real estate and two in infrastructure. Post the restructuring, RMZ’s core commercial real estate business, luxury housing and hospitality business will be moved to the real estate units while its industrial and logistic businesses and data centers will fall under the infrastructure arms.

The group has two equal partnerships with Canada Pension Plan Investment Board, and Mitsui Fudosan for developing commercial offices in India. It is also exploring more such alliances with sovereign wealth funds and other global investors, Menda said.