Europe Middle East and Africa (EMEA) Data Center Colocation Market - Forecasts from 2025 to 2030

The Europe Middle East and Africa (EMEA) data center colocation market is expected to grow from USD 29.751 billion in 2025 to USD 51.208 billion in 2030, at a CAGR of 11.47%.

Hyperscale Demand and Digital Transformation

The increasing reliance on colocation services by hyperscale data center users, such as cloud providers and tech giants, is a primary growth driver. In 2023, major cloud providers like Microsoft and Google leased significant capacity in urban centers across Europe, boosting demand for scalable infrastructure. The Middle East and Africa are undergoing rapid digital transformation, fueled by the fourth industrial revolution, IoT, and smart city initiatives. The rollout of 5G networks across these regions in 2023 further accelerates demand for colocation facilities, enabling low-latency applications and enhanced connectivity for IoT and AI-driven services.

Industry Investments and Expansion

Colocation providers are actively expanding to meet rising demand. In February 2023, Data4 established a new data center in Hanau, Germany, on a former army barracks site, signaling robust investment in Western Europe. Similarly, in the Middle East, providers like Khazna Data Centers are scaling up, with new facilities planned to support hyperscale requirements. These expansions reflect a strategic focus on capturing market share in both developed and emerging EMEA markets, driven by increased business investments and product innovation.

Government Initiatives and Regulatory Support

Government policies are fostering market growth through incentives and regulatory frameworks. In 2023, France reduced tariffs on energy for data centers, encouraging further investment. Switzerland’s Federal Act on Data Protection (FADP), aligned with GDPR, bolstered investor confidence by ensuring robust data privacy standards. In the Middle East, Saudi Arabia’s USD 18 billion plan to build a national network of hyperscale data centers, announced prior to 2023 but actively progressing, continues to drive regional growth. These initiatives create a favorable environment for colocation providers, particularly in regions prioritizing digital infrastructure.

UK Market Growth

The UK is emerging as a prime location for colocation services, driven by advancements in ICT infrastructure. In 2023, the telecom sector’s growth, exemplified by Vodafone’s rising brand value, increased demand for data center professional services. Government-backed initiatives to enhance digital infrastructure are expected to sustain this momentum, positioning the UK as a key market through 2028.

Rapid Growth in the Middle East

The Middle East is witnessing accelerated market expansion, supported by strategic investments. In 2023, Saudi Arabia advanced its digital infrastructure goals, with local firms like Gulf Data Hub and Al-Moammar Information Systems contributing to hyperscale facility development. The adoption of 5G services by telecom providers across the region further drives demand for colocation, supporting smart city projects and digital economies in countries like the UAE and Qatar.

Key Market Developments

Strategic Acquisitions and Infrastructure Investments

In January 2023, CyrusOne acquired an office complex in Frankfurt, Germany, for EUR 95 million (USD 102.3 million) to develop a data center campus, strengthening its European presence. In October 2022, Khazna Data Centers partnered with Masdar and EDF to build a solar-powered facility in Masdar City, aligning with sustainability goals. These developments highlight a trend toward sustainable and scalable infrastructure to meet hyperscale demands.

Sustainability and Renewable Energy Focus

Sustainability is a growing priority, with colocation providers investing in renewable energy solutions. In 2023, the EMEA region saw increased adoption of solar and other renewable energy sources to power data centers, driven by stringent environmental regulations and initiatives like Saudi Arabia’s Vision 2030, which emphasizes renewable energy integration. These efforts align with regional sustainability goals and enhance market appeal.

Market Segmentation Insights

By Service Type

Retail colocation services dominate, projected to reach over USD 9.5 billion by 2025, driven by demand from SMEs and organizations in developing EMEA countries. Wholesale colocation is growing rapidly, fueled by hyperscale users requiring large-scale capacity, with lease terms extending up to 15 years compared to retail’s five-year contracts.

By Geography

Western Europe, led by the FLAP-D markets (Frankfurt, London, Amsterdam, Paris, Dublin), holds the largest share, with Milan emerging as a key hub in 2023. The Middle East, particularly the UAE and Saudi Arabia, contributes significantly, with the UAE accounting for 30% of regional capacity. Africa is experiencing growth in markets like South Africa and Kenya, driven by digitalization and smart city initiatives.

By Industry Vertical

The IT and telecom sector leads, driven by the need for high-speed connectivity and data storage. Healthcare and BFSI sectors are also significant, with colocation facilities supporting secure data management and compliance with stringent regulations.

Competitive Landscape

Key players, including Equinix, Digital Realty, and Khazna Data Centers, dominate through strategic expansions and acquisitions. New entrants like Agility and EDGNEX Data Centres by DAMAC are disrupting the market, leveraging existing customer bases to drive revenue. In 2023, these providers focused on hyperscale and sustainable facilities 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).

Segmentation:

By Colocation Type

• Retail Colocation
• Wholesale Colocation

By

Enterprises

• Small
• Medium
• Large

By End-user

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

By Geography

• United Kingdom
• Germany
• France
• Spain
• Italy
• Saudi Arabia
• UAE
• Others