South Africa Data Center Colocation Market - Supply & Demand Analysis 2026-2031

South Africa data center colocation market is expected to grow at a CAGR of 12.09% from 2025 to 2031.

RECENT DEVELOPMENTS & NEWS IN THE SOUTH AFRICA DATA CENTER COLOCATION MARKET

• In November 2025, Teraco, a Digital Realty company, announced the completion of the expansion of its CT2 data center facility in Cape Town, accounting for an IT power capacity of around 50MW.
• In March 2025, Teraco, a Digital Realty company, announced the signing of a PPA with NOA, a South African energy aggregator, to receive wind energy for its data centers, with the first power delivery expected in 2026.
• In March 2025, Vantage Data Centers partnered with Attacq, a real estate developer, to build a data center in Johannesburg. The investment for the construction stood at $34 million.
• As of January 2026, according to the Uptime Institute, South Africa has around eight data center facilities (either in the design or construction phase) that have received the Tier III certification and around four data centers in South Africa that have received Tier IV accreditation from the Uptime Institute, either during the design or construction stage.

SOUTH AFRICA DATA CENTER COLOCATION MARKET INSIGHTS BY UTILIZED AREA

The South Africa data center colocation market by utilized area is expected to reach 2.07 million square feet by 2031. South Africa is one of Africa’s major data center markets, offering significant space for colocation expansion. Government initiatives, including Special Economic Zones (SEZs) and investment incentives, are helping attract foreign investment and support data center development.

In 2025, Johannesburg and Cape Town remained the major data center development hubs, with operators such as Vantage Data Centers, Teraco (Digital Realty), and Cassava Technologies adding capacity. As of March 2026, around 10 data center projects were under construction, planned, or announced, creating additional capacity and supporting the future growth of the colocation market.

SOUTH AFRICA DATA CENTER COLOCATION MARKET INSIGHTS BY UTILIZED RACKS

The South Africa data center colocation market by utilized racks is expected to reach 55.91 thousand units by 2031. Growing demand for high-density computing, cloud services, and edge processing is driving the adoption of advanced rack systems across data centers. Modern racks offer greater flexibility, energy efficiency, and scalability through features such as integrated cooling, modular layouts, and smart monitoring, enabling operators to optimize performance, improve space utilization, and reduce operational costs.

SOUTH AFRICA DATA CENTER COLOCATION MARKET TRENDS

Rise of Automation and Digitalization Trends

The South Africa data center market is increasingly using AI technologies to boost operational efficiency. Technologies, including AI-driven cooling and workload optimization, have become essential to meet the growing demand for High-Performance Computing (HPC). These advancements are essential for the growth of industries such as AI, cloud computing, and digital transformation.

The government of South Africa is investing in artificial intelligence. For instance, in July 2025, South Africa’s Minister of Science, Technology, and Innovation announced the country’s investment of approximately $28.4 million in AI, blockchain, and other emerging technologies to strengthen foundational digital capabilities in the public sector.

SOUTH AFRICA DATA CENTER COLOCATION MARKET DRIVERS

Development of Artificial Intelligence

South Africa is focusing on digitalization as the country’s strategic priority and economic growth engine. In March 2025, Cassava Technologies, the owner of Africa Data Centres, declared plans to build an AI factory in South Africa by upgrading its data centers with Nvidia AI computing technology.

In 2024, Open Access Data Centres (OADC), an Africa-based data center company, started a partnership with Reflex, a managed services provider, to drive the AI landscape in South Africa with an AI-ready data center solution.

Government policies such as the AI Institute of South Africa (AIISA) and the National AI Policy Framework were launched to boost AI penetration among different sectors of the South African economy.

Inland Connectivity in South Africa

Submarine cables play an important role in global internet provision, carrying over 90% of international data traffic as they enable communication across continents. Data centers located near submarine cable landing stations benefit from improved connectivity and internet speed, thereby making them an attractive way for businesses to rely on internet services.

As of November 2025, South Africa hosts around 11 operational submarine cables, such as 2Africa, Africa Coast to Europe (ACE), Djibouti Africa Regional Express 1 (DARE 1), Eastern Africa Submarine System (EASSy), Equiano, Meltingpot Indianoceanic Submarine System (METISS), SAFE, SAT-3/WASC, SEACOM/Tata TGN-Eurasia, T3, and West Africa Cable System (WACS). The country is witnessing investment in two more submarine cables, which are expected to become operational by the forecast period.

In November 2025, Seacom announced an investment of around $2 billion in its new Seacom 2.0 submarine cable, which will connect Africa (including South Africa), Europe, and Asia. The system will be built in four phases, with the first phase running from Egypt to Mombasa, Kenya, and the second phase extending the cable from Kenya to South Africa.

INDUSTRY RESTRAINT

Shortage of Skilled Workforce

The South Africa data center market has witnessed significant growth in recent years and is one of the largest and most established data center markets in Africa. In South Africa, the demand for experts in fields, including data engineering, cloud architecture, and AI, is outpacing the supply of qualified talent.

The major areas witnessing a substantial skill gap include data security, AI/ML, and cloud computing. Though South Africa has the presence of several educational institutions, the country’s curriculum does not match the needs of the job market. As a result, graduating students may not have the practical skills required by the industry. Moreover, with technological advancements, new sectors have emerged; the education sector, however, has been slow in catching up with the demands of the job market.

Power Reliability Challenges in South Africa

The South Africa energy sector faces common challenges, such as power outages and load shedding, due to insufficient generation capacity. Its power is heavily dependent on coal-fired plants in the energy grid. According to the National Energy Regulator of South Africa (NERSA), coal power stations generated around 81% of the country’s electricity in the first half of 2025.

South Africa is trying to shift its energy mix from coal to renewable energy sources such as wind and solar; however, the transition has been slow. According to the National Energy Regulator of South Africa (NERSA), renewable energy, nuclear power, imports, and gas contributed 8%, 4%, 3%, and 3%, respectively, to the country’s electricity supply.

SOUTH AFRICA 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 South Africa’s colocation demand, accounting for around 70% of the market’s total demand. This dominance is driven by enterprise digitalization, data sovereignty requirements, and the growing preference for hybrid infrastructure. The increasing adoption of AI is further supporting demand as enterprises seek greater computing capacity, scalability, and operational efficiency.

INSIGHTS BY COLOCATION REVENUE

In terms of colocation revenue, wholesale colocation accounted for the largest South Africa data center colocation market share in 2025. Demand for wholesale colocation is expected to grow with the increasing adoption of cloud-based services and is projected to surge through 2031, reflecting a growing preference for long-term, high-capacity leases. This allows organizations to scale their infrastructure and maintain greater control without the capital expense of developing and operating their own data centers.

WHAT'S INCLUDED?

• A transparent research methodology and insights on the colocation demand and supply aspect 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 South Africa 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 South Africa by several industries.
• The study on sustainability status in South Africa.
• Analysis of current and future cloud operations in South Africa.
• The snapshot of upcoming submarine cables in South Africa.
• Snapshot of existing and upcoming third-party data center facilities in South Africa.
• Facilities Covered (Existing): 55
• Facilities Identified (Upcoming): 10
• Coverage: 25+ cities
• Existing vs. Upcoming (White Floor Area)
• Existing vs. Upcoming (IT Load Capacity)
• Data center colocation market in South Africa.
• Colocation Market Revenue & Forecast (2025-2031)
• Retail Colocation Revenue (2025-2031)
• Wholesale Colocation Revenue (2025-2031)
• Retail Colocation Pricing along with Addons
• 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 South Africa.
• 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.

The report includes:

• Colocation Supply (MW, Area, Rack Capacity)
• Colocation Demand (MW, Area, Rack Capacity) and by End-User (Cloud/IT, BFSI, etc.)
• Colocation Revenue (Retail & Wholesale Colocation Services)
• Competitive Scenario (Share Analysis by Revenue & MW Capacity)

VENDOR LANDSCAPE

Existing Colocation Operators

• Teraco (Digital Realty)
• Africa Data Centres
• Digital Parks Africa
• Vantage Data Centers
• Equinix
• Open Access Data Centres
• Others

New Operators

• The Cavaleros Group

KEY QUESTIONS ANSWERED:

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