Hillhouse Bets Big on India Data Centres

Singapore-based investment firm Hillhouse Investments plans to double its investments in India over the next two to three years, with data centres emerging as a major focus of the expansion, according to an interview published by The Economic Times.

Hillhouse has already deployed more than $2 billion in India across real estate, private equity and credit, with its total commitments in the country approaching $4 billion in assets. The firm now sees data centres as a market large enough to warrant a dedicated investment pool.

For Hillhouse, the attraction is not simply the growth of India's digital economy. It is the gap between the country's enormous data generation and its still relatively small data-centre footprint.

Siddhartha Gupta, founder of Alta Capital, Hillhouse's local partner, told The Economic Times that data centres have been given a separate co-investment sleeve because the opportunity could require several billion dollars. India generates around 20% of global data but has only about 2%-3% of global data-centre capacity, he said. Hillhouse estimates India's installed capacity at roughly 1.5-2 GW, compared with 35-50 GW in China.

The investment case is being reinforced by the pace at which India's data-centre market is expanding. Data-centre capacity additions rose 59% year-on-year in the first half of 2026 to 258 MW of IT capacity, taking operational stock to about 1.8 GW, according to Savills India data reported by ETDatacenters. Savills expects the market to exceed 7 GW by 2030.

That growth is also changing the nature of real-estate investment. Data centres require large sites, reliable power, connectivity and specialised construction, turning digital infrastructure into a significant real-estate and infrastructure play. In the second quarter of 2026, data centres accounted for 38% of private-equity inflows into Indian real estate, ahead of offices at 30%, according to Savills India.

Hillhouse says it wants to go beyond buying individual assets. Its strategy is to build a full-stack data-centre platform in India, bringing together capital, operating teams and expertise in construction and design. Gupta said the firm would draw on Hillhouse's regional data-centre scale, including relationships with global hyperscalers and knowledge of construction-cost optimisation and design.

The strategy fits with Hillhouse's wider approach to Indian real assets. The firm describes its model as closer to venture capital: identify a structural trend, back an operating team and build a platform around it rather than simply acquiring finished properties. It has used a similar approach in logistics, where its platform Logicap has grown from less than 2 million sq ft to nearly 25 million sq ft, according to the company.

Hillhouse's broader data-centre exposure also gives some indication of the capital intensity of the sector. The firm is the largest shareholder of Singapore-headquartered DayOne Data Centers and was among the investors leading its $4.5 billion Series C financing completed in June 2026.

For India, the significance of Hillhouse's move goes beyond one investor. It reflects a broader shift in how institutional capital is viewing data centres: no longer as a niche technology asset, but as core infrastructure tied to cloud computing, AI and the country's expanding digital economy.

The challenge will be execution. India's data-centre pipeline is growing rapidly, but access to power, suitable land and infrastructure remains critical to converting investment commitments into operational capacity.

Hillhouse's planned expansion therefore amounts to a bet not just on more servers and computing demand, but on the physical infrastructure needed to support India's next phase of digital growth.

Sources https://economictimes.indiatimes.com/news/company/corporate-trends/singapore-based-hillhouse-plans-to-double-india-investments-with-real-estate-data-centres-in-focus/articleshow/133223528.cms?from=mdr