Asia Pacific (APAC) Colocation Market - Forecasts from 2025 to 2030

The Asia Pacific (APAC) colocation market is expected to grow from USD 20.788 billion in 2025 to USD 37.660 billion in 2030, at a CAGR of 12.62%.

Surge in Digital Transformation

The APAC region is undergoing rapid digital transformation, fueled by government initiatives and private sector investments in smart cities, IoT, and Industry 4.0. In 2024, countries like China and India accelerated digital infrastructure development, with China’s Digital Silk Road initiative driving data center demand. The rollout of 5G networks across Japan, South Korea, and Southeast Asia has increased the need for low-latency, high-capacity colocation facilities to support real-time applications, significantly boosting market growth.

Growing Demand from Hyperscale Cloud Providers

Hyperscale cloud providers, such as AWS, Microsoft Azure, and Alibaba Cloud, are major drivers of colocation demand. In 2023, these companies expanded their presence in APAC, leasing large-scale colocation capacities in key hubs like Singapore and Tokyo to support cloud and AI workloads. The increasing reliance on cloud services by enterprises across sectors further amplifies the need for scalable, secure colocation infrastructure.

Rising Data Consumption and E-Commerce Growth

The APAC region’s booming e-commerce sector and increasing internet penetration are driving data consumption. In 2024, India’s e-commerce market grew by 15%, necessitating robust data center infrastructure to handle transaction volumes and user data. This surge in data generation fuels demand for colocation services, particularly for retail and wholesale facilities catering to diverse enterprise needs.

Government Support and Regulatory Incentives

Government policies promoting digital economies are key growth catalysts. In 2023, Singapore introduced incentives for sustainable data center development, encouraging green colocation facilities. India’s Data Centre Policy 2020, actively implemented in 2024, aimed to establish the country as a global data hub, attracting investments from colocation providers. These initiatives create a favorable environment for market expansion.

Market Challenges

High Capital Investment

The high cost of building and maintaining colocation facilities, including advanced cooling systems and power infrastructure, poses a challenge. In 2024, the average cost of constructing a hyperscale data center in APAC was estimated at USD 200 million, limiting entry for smaller players and straining budgets in developing markets.

Power and Sustainability Concerns

Power shortages and sustainability requirements are significant hurdles. In 2023, Southeast Asian countries like Indonesia faced power grid constraints, impacting data center scalability. Regulatory pressures to adopt renewable energy sources, while aligning with sustainability goals, increase operational costs for providers.

Regulatory Complexity

Diverse regulatory frameworks across APAC countries complicate market expansion. In 2024, compliance with data sovereignty laws in China and India required localized data storage, increasing costs for colocation providers. Harmonizing these regulations remains a challenge for regional scalability.

Market Segmentation Analysis

By Colocation Model

Retail colocation dominates, catering to small and medium enterprises (SMEs) with flexible, short-term leases. In 2024, retail colocation accounted for over 60% of the market share, driven by SME digitalization. Wholesale colocation is growing rapidly, fueled by hyperscale users requiring large-scale, long-term capacity, particularly in Singapore and Japan.

By End-User

Large enterprises lead the market, driven by cloud and IT giants requiring extensive data center capacity. SMEs are a fast-growing segment, with a 12% increase in demand in 2024, as digital adoption accelerates among smaller businesses in India and Southeast Asia.

By Industry Vertical

The communication and technology sector dominates, driven by telecom and cloud providers’ need for high-speed connectivity and storage. Healthcare and banking, financial services, and insurance (BFSI) sectors are expanding, with colocation facilities supporting secure data management and compliance with stringent regulations. In 2024, healthcare data centers in Japan grew by 10%, driven by telemedicine and digital health platforms.

By Country

Singapore and Japan hold the largest market shares, with Singapore’s advanced infrastructure and Japan’s robust ICT ecosystem driving growth. In 2024, Singapore accounted for 25% of APAC colocation capacity. India is the fastest-growing market, fueled by government policies and a 20% surge in data center investments in 2023. China follows, supported by hyperscale demand, while emerging markets like Indonesia and Thailand show moderate growth due to increasing digitalization.

Competitive Landscape

Key players, including Equinix, Digital Realty, and NTT Communications, dominate through strategic expansions and partnerships. In 2023, Equinix launched a new hyperscale facility in Singapore, enhancing its regional footprint. Emerging players like AirTrunk and ST Telemedia Global Data Centres are disrupting the market with sustainable, scalable solutions. These companies focus on green technologies and AI-ready infrastructure to meet evolving demands.

Key Benefits of this Report:

• Insightful Analysis: Gain detailed market insights covering major as well as emerging geographical regions, focusing on customer segments, government policies and socio-economic factors, consumer preferences, industry verticals, and other sub-segments.
• Competitive Landscape: Understand the strategic maneuvers employed by key players globally to understand possible market penetration with the correct strategy.
• Market Drivers & Future Trends: Explore the dynamic factors and pivotal market trends and how they will shape future market developments.
• Actionable Recommendations: Utilize the insights to exercise strategic decisions to uncover new business streams and revenues in a dynamic environment.
• Caters to a Wide Audience: Beneficial and cost-effective for startups, research institutions, consultants, SMEs, and large enterprises.

What do businesses use our reports for?

Industry and Market Insights, Opportunity Assessment, Product Demand Forecasting, Market Entry Strategy, Geographical Expansion, Capital Investment Decisions, Regulatory Framework & Implications, New Product Development, Competitive Intelligence

Report Coverage:

• Historical data from 2022 to 2024 & forecast data from 2025 to 2030
• Growth Opportunities, Challenges, Supply Chain Outlook, Regulatory Framework, and Trend Analysis
• Competitive Positioning, Strategies, and Market Share Analysis
• Revenue Growth and Forecast Assessment of segments and regions including countries
• Company Profiling (Strategies, Products, Financial Information, and Key Developments among others).

The Asia Pacific (APAC) Colocation Market is analyzed into the following segments:

By Colocation Type

• Retail Colocation
• Wholesale Colocation

By

Enterprises Size

• Small
• Medium
• Large

By End-user

• BFSI
• IT & Telecommunication
• Manufacturing
• Healthcare
• Energy
• Government
• Media and Entertainment
• Others

By Country

• Japan
• China
• India
• South Korea
• Indonesia
• Thailand
• Others