Amazon Data Services India has leased a 4-acre land parcel in Mumbai’s Powai suburb from Larsen & Toubro through a long-term agreement spanning nearly 18 years. The deal further strengthens Amazon’s aggressive data centre expansion strategy in India.
Documents accessed through CRE Matrix show that Amazon Data Services India plans to develop a new data centre facility on the leased land in Powai. The company will pay more than Rs 562 crore in rent over the lease tenure, excluding annual escalations.
Lease Deal Includes Annual Rent Escalation Clause
The lease agreement includes a 3% annual escalation in rental payments. Amazon Data Services India has also paid a security deposit of Rs 2.40 crore to Larsen & Toubro as part of the transaction.
In addition, the company agreed to pay a premium of Rs 18 crore per acre. Therefore, the total upfront premium payment is Rs 72 crore for the entire parcel.
The agreement provides Amazon with a 24-month rent-free period spread across the lease term. This includes the first six months from the lease commencement date.
Long-Term Lock-In Highlights Strategic Commitment
The lease agreement includes a lock-in period of 15 years for Amazon Data Services India, while the landlord remains locked in for the entire lease tenure.
The transaction was officially registered on August 3. According to the agreement, the handover of the land parcel is expected between April 2025 and March 2026. Meanwhile, the lease expiry date is set for August 15, 2043.
Amazon Expands Its Powai Data Centre Footprint
This is Amazon’s second major land lease transaction with Larsen & Toubro in Powai.
Last year, Amazon leased an adjacent 5.5-acre land parcel from L&T for 21.5 years. The deal valued at Rs 921 crore, excluding annual rental escalations.
With the latest transaction, Amazon’s cumulative lease commitments across the combined 9.5-acre land parcels now approach Rs 1,500 crore over the total lease tenure.
Amazon Continues Aggressive Data Centre Expansion In India
Amazon Data Services India has significantly accelerated its India data centre investments over the past few years.
In October last year, Amazon Data Services India signed a long-term sub-lease agreement with K Raheja Corp subsidiary Newfound Properties and Leasing for a commercial tower spanning 4.51 lakh sq ft in Thane. The company plans to use the property to set up another data centre facility.
Earlier, Amazon also acquired a 54-acre land parcel in Thane from Kalpataru Group for over Rs 1,870 crore in one of the largest outright land transactions in the region. The company plans to develop a hyperscale data centre campus on the site.
India Emerges As A Major Data Centre Growth Market
India’s rapid digital transformation continues to drive strong demand for data centre infrastructure across major cities.
The growing adoption of digital payments, cloud computing, gaming, artificial intelligence, streaming platforms, and emerging technologies such as the metaverse is driving a sharp rise in data consumption across India. This surge in digital activity is accelerating demand for large-scale data centre infrastructure nationwide.
The Indian data centre market is also benefiting from data localisation requirements and the government’s proposed data centre policy. This aims at simplifying approvals and infrastructure development.
Global technology giants, including Google, Microsoft, and Amazon, are actively scaling hyperscale data centre infrastructure across India.
Infrastructure Upgrades Strengthen India’s Data Centre Potential
Industry experts believe India is becoming one of the most attractive Asia-Pacific markets for data centre development and investment.
New submarine cable infrastructure linking Mumbai and Chennai with Singapore, Southeast Asia, Europe, and the Middle East will significantly improve global connectivity. The development is also likely to strengthen India’s position as a key regional digital infrastructure and data centre hub.
With a population exceeding 1.4 billion, rising internet penetration, expanding 5G networks, and increasing enterprise cloud adoption, India is expected to witness sustained growth in data centre demand over the coming years.
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