Chennai: India’s data centre sector saw a return to multi-city investment strategies in the first half of 2026, according to a recent market research report. Investors are committing capital for new data centre projects spread across multiple hubs, after a brief dominance of single-site mega projects. The multi-city capital deployment accounted for over 85% of $38 billion in investment commitments in H1 2026, while single-city allocations contracted, according to real estate consultancy CBRE’s report.Large capacity additions are typically spread across several cities to build resilience. Between 2021 and 2023, multi-city portfolios accounted for over 60% of total investments, alongside targeted spending in primary hubs like Mumbai, Delhi-NCR, Bengaluru, and Chennai. The trend temporarily shifted in 2024 and 2025, with Hyderabad capturing 23% and 15% of total investments, while tier-II cities secured 16% and 27% in those respective years. This was largely driven by standalone mega projects, such as Google’s centre in Vizag.India added 130 megawatts (MW) of new capacity, with 94% of this new supply in Mumbai, while Chennai accounted for the remaining 6%. Established data centre micro markets like Navi Mumbai and Chennai’s Siruseri continue to witness the bulk of new activity. Currently, Mumbai holds over 52% of the country’s total data centre capacity, with Chennai at 18%.With more than 200 MW expected to be added in the second half of the year, India’s total operational capacity is on track to reach 2 gigawatts (GW) by the end of 2026. While more than 80% of India’s operational capacity remains concentrated in Mumbai, Chennai, and Delhi-NCR, incremental capacity is expected in secondary and emerging hubs, driven by the better availability of land, power, and water.Anshuman Magazine, chairperson and CEO (India, SEA, Middle East and Africa) of CBRE, told TOI that India’s data centre landscape is becoming more geographically diverse. “Hyderabad is emerging as a key growth market and operators are expected to add more capacity in Bengaluru, Kolkata, and Visakhapatnam as they weigh access to land, power, water, and connectivity. The lower share of new supply in H1 2026 therefore does not, on its own, suggest that hyperscaler demand is moving away from Chennai. It reflects a maturing multi-hub market,” he said.The recent investments bring India’s total data centre commitments to around $173 billion since 2021. Over 15% of this capital is specifically dedicated to supporting Artificial Intelligence (AI). Large global tech companies and cloud providers, called hyperscalers, continue to drive most of the real estate demand, accounting for 50-55% of current market activity.
