Australia Data Center Colocation Market - Supply & Demand Analysis 2026-2031

Australia data center colocation market size in terms of revenue is expected to grow at a CAGR of 16.49% from 2025 to 2031.

AUSTRALIA DATA CENTER COLOCATION MARKET INSIGHTS BY UTILIZED AREA

The Australia data center colocation market by utilized area is expected to reach 20.86 million square feet by 2031. Australia consists of over 500 industrial parks, including the Kwinana Strategic Industrial Area, which supports enterprises in establishing and operating their businesses by providing several benefits, including tax incentives, enhanced connectivity, and access to essential resource-sharing options.

AUSTRALIA DATA CENTER COLOCATION MARKET INSIGHTS BY UTILIZED RACKS

The Australia data center colocation market by utilized racks is expected to reach 513.13 thousand units by 2031. In Australia, the average rack power density of data centers ranges between 10 kW and 12 kW per rack. However, it is expected to rise significantly by 2030 due to the growing adoption of big data, IoT, AI, and ML applications in the country.

Data centers in Australia use racks ranging from 36U to 52U in height, with the standard width being 19 inches. 42U racks remain the most deployed size due to their versatility in housing various server types.

KEY TAKEAWAYS

• Colocation Demand by End-User: The cloud & IT sector dominated the market in 2025, accounting for around 73% of Australia’s colocation demand.
• Colocation Revenue: Wholesale colocation dominates for over 66% of the market’s total revenue share in 2025.

RECENT DEVELOPMENTS & NEWS IN THE AUSTRALIA DATA CENTER COLOCATION MARKET

• In September 2026, NVIDIA collaborated with Australian NVIDIA Cloud Partners and AI infrastructure partners including Firmus, Sharon AI, IREN, ResetData, Megaport, CDC, NEXTDC and AirTrunk to expand land, power and shell capacity designed to host multiple generations of NVIDIA DSX compute infrastructure, with up to a 2GW buildout by 2027.
• In September 2026, Anthropic signed a lease for a planned 2.16 GW data center campus in Queensland, Australia, developed by Singapore-based Zerra DC. The facility is expected to come online in phases starting in 2027.
• In August 2026, DoverDC filed an application with the Victorian Department of Transport and Planning for the development of a data center, SM1B, in Melbourne. It will offer an IT capacity of 200 MW.
• In April 2025, DCI Data Centers planned to establish a new data center facility, covering a total area of around 62.7 thousand square feet in Canberra, Australia.
• In April 2025, STACK Infrastructure planned to develop a new data center facility, offering power capacity of around 450MW in Sydney, Australia.
• In April 2025, Goodman planned the development of a new data center campus, offering combined IT capacity of around 90MW in Sydney.

AUSTRALIA DATA CENTER COLOCATION MARKET TRENDS

Increased Demand for AI and Digitalization Services

The demand for AI and digitalization services in Australia has increased, driven by technological advances, changing consumer preferences, and the need for businesses to enhance efficiency. In November 2025, Harbor Solutions, in partnership with Zadara, launched a sovereign AI cloud platform with Nvidia GPUs for customers in Australia and New Zealand. The in-country, multi-tenant platform offers secure storage, compute, and networking with AI tools to support sovereign and high-performance AI workloads.

5G Deployment and Rise of Edge Data Centers

The deployment of 5G technology in Australia is growing significantly. Australia is among the most connected countries across the globe through mobile infrastructure, global communication, information technology, and social communication.

The Australian Communications and Media Authority (ACMA) is the country’s federal telecommunications regulatory authority. It plays a significant role in digital transformation as well as maximizing the economic and social benefits of communications infrastructure, services, and digital content.

AUSTRALIA DATA CENTER COLOCATION MARKET DRIVERS

Rapid Expansion and Increased Investments in Big Data and IoT Technology

IoT and Big Data technologies have become an important aspect for companies working with physical assets. They enable companies to collate and manage large volumes of data sourced from different places and sources. Thus, IoT provides real-time data analytics, storage capacity, scalability, and cost efficiency. In February 2025, Services Australia’s $141.7 million contract extension with Canberra Data Centres highlighted the growing need for secure, high-capacity data infrastructure to manage large volumes of government data and real-time digital services.

Government Initiatives to Boost the Data Center Market

The Australian government has implemented several supportive initiatives, such as offering tax incentives and introducing several digital strategies, which promote the growth of data centers in the country. These measures aim to enhance the position of Australia as a regional tech hub and attract local and international investments.

The Australian government actively pursues initiatives to enhance its data center capabilities through strategic partnerships, sustainability measures, and regulatory frameworks. These efforts aim to improve operational efficiency, reduce environmental impact, and ensure the secure handling of sensitive information across various government agencies.

INDUSTRY RESTRAINT

High-Energy Consumption and Environmental Concerns

The data center industry in Australia is growing and positioning itself as a hub for digital infrastructure in APAC. With this growing demand, data centers face challenges, including high power and energy consumption. Data centers currently account for around 2% of Australia’s grid-supplied electricity, while AEMO expects demand to increase substantially as new facilities and expansions come online. The 2026 Oxford Economics/AEMO outlook forecasts NEM data center consumption to rise from 5.1 TWh in FY2026 to 15.5 TWh by FY2030.

AUSTRALIA DATA CENTER COLOCATION MARKET SEGMENTATION INSIGHTS

INSIGHTS BY COLOCATION DEMAND

In terms of colocation demand by industry, the cloud & IT sector dominated the market in 2025 with the largest share of Australia’s colocation demand, accounting for around 73% of the market’s total demand. This domination is led by a rapid surge in enterprise cloud migration, hyperscale cloud adoption, advancements in emerging technologies like cloud computing, artificial intelligence, machine learning, and others, along with rising enterprise digitalization initiatives.

INSIGHTS BY COLOCATION REVENUE

In terms of revenue, wholesale colocation dominates for over 66% of the market’s total revenue share in 2025. This dominance is expected to strengthen further as cloud adoption accelerates, with hyperscale and cloud service providers increasingly relying on wholesale colocation for housing portions of their workloads.

Enterprises across diverse industries also prefer to migrate their data and workloads to the cloud platform to leverage advanced technologies such as AI, IoT, and big data for enhancing their operational efficiency. Several cloud companies will require wholesale colocation space to store vast amounts of data, generated by multiple enterprises, which will create growth opportunities for wholesale colocation providers during the forecast period.

AUSTRALIA DATA CENTER COLOCATION MARKET VENDOR LANDSCAPE

Colocation operators, including CDC Data Centres, AirTrunk, NEXTDC, Equinix, Digital Realty, GreenSquareDC, STACK Infrastructure, DCI Data Centers, Macquarie Data Centres, and Keppel DC REIT, among others, have been considered for determining the revenue from the Australian colocation data center market. Among these colocation companies, AirTrunk led the country’s colocation market with the highest revenue.

NEXTDC contributed significantly to the Australian colocation data center market’s colocation revenue in 2025, while Equinix also accounted for a notable share of the country’s colocation revenue during the same period.

WHAT'S INCLUDED?

• A transparent research methodology and insights on the colocation demand and supply aspects of the market.
• Market size available in terms of utilized white floor area, IT power capacity, and racks.
• Market size available in terms of Core & Shell Vs Installed Vs Utilized IT Power Capacity, along with the occupancy%.
• The study of the existing Australian data center market landscape, and insightful predictions about data center market size during the forecast period.
• An analysis of the current and future colocation demand in Australia by several industries.
• The study on sustainability status in Australia.
• Analysis of current and future cloud operations in Australia.
• A snapshot of upcoming submarine cables in Australia.
• Snapshot of existing and upcoming third-party data center facilities in Australia.
• Facilities Covered (Existing): 145
• Facilities Identified (Upcoming): 65
• Coverage: 20+ Cities
• Existing vs. Upcoming (White Floor Area)
• Existing vs. Upcoming (IT Load Capacity)
• Data center colocation market in Australia.
• Colocation Market Revenue & Forecast (2025-2031)
• Retail Colocation Revenue (2025-2031)
• Wholesale Colocation Revenue (2025-2031)
• Retail Colocation Pricing along with Add-ons
• Wholesale Colocation Pricing along with the pricing trends.
• An analysis of the latest trends, potential opportunities, growth restraints, and prospects for the colocation data center industry in Australia.
• Competitive landscape, including market share analysis by the colocation operators based on IT power capacity and revenue.
• Vendor landscape of each existing and upcoming colocation operator based on existing/ upcoming count of data centers, white floor area, IT power capacity, and data center location.

TARGET AUDIENCE

• Data center Real Estate Investment Trusts (REITs)
• Data center Construction Contractors
• Data center Infrastructure Providers
• New Entrants
• Consultants/Consultancies/Advisory Firms
• Corporate and Government Agencies

Existing Colocation Operators

• AirTrunk
• NEXTDC
• CDC Data Centres
• STACK Infrastructure
• Macquarie Data Centres
• DCI DATA CENTERS
• Equinix
• Keppel DC REIT
• Digital Realty
• Telstra InfraCo
• Global DigiCo
• Polaris Data Centre
• Fujitsu
• Others

New Operators

• Quinbrook Infrastructure Partners
• Goodman
• GreenSquareDC
• IFM Investors
• ISPT
• Centuria Industrial REIT
• Stockland
• DOMA Infrastructure Group
• Vantage Data Centers
• MARKHAM
• Others

KEY QUESTIONS ANSWERED:

1. How much MW of IT power capacity is likely to be utilized in Australia by 2031?
2. What is the count of existing and upcoming colocation data center facilities in Australia?
3. Who are the new entrants in the Australia data center industry?
4. What factors are driving Australia data center colocation market?