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Australia Data Center Colocation Market - Supply and Demand Analysis and Forecast 2026-2031 | AI and Cloud Demand Drive 16.49% CAGR and Wholesale Growth Through 2031

globenewswire.com
NVDA Nvidia GPUs are being used in a new sovereign AI cloud platform in Australia, indicating demand for their high-performance AI hardware. EQIX Equinix is listed as an established operator in the Australian data center colocation market, which is experiencing significant growth. DLR Digital Realty is listed as an established operator in the Australian data center colocation market, which is experiencing significant growth. AMZN Amazon's AWS (hyperscale cloud provider) is a major driver of colocation demand in Australia, benefiting from enterprise cloud migration and AI adoption. GOOG Alphabet's Google Cloud (hyperscale cloud provider) is a major driver of colocation demand in Australia, benefiting from enterprise cloud migration and AI adoption. MSFT Microsoft Azure (hyperscale cloud provider) is a major driver of colocation demand in Australia, benefiting from enterprise cloud migration and AI adoption.

Australia Data Center Colocation Market - Supply and Demand Analysis and Forecast 2026-2031 | AI and Cloud Demand Drive 16.49% CAGR and Wholesale Growth Through 2031 Dublin, Oct. 06, 2026 (GLOBE NEWSWIRE) -- "Australia Data Center Colocation Market - Supply & Demand Analysis 2026-2031" has been added to ResearchAndMarkets.com's offering.

The Australia data center colocation market is projected to expand at a compound annual growth rate of 16.49% by revenue from 2025 to 2031. Growth is being supported by hyperscale cloud adoption, enterprise digitalization, artificial intelligence, machine learning, big data, IoT workloads, 5G deployment and government investment in secure digital infrastructure.

Market Capacity and Utilization Insights

Australia's utilized data center area is expected to reach 20.86 million square feet by 2031, while utilized racks are forecast to total 513.13 thousand units. The country has more than 500 industrial parks, including the Kwinana Strategic Industrial Area, offering benefits such as tax incentives, enhanced connectivity and resource-sharing opportunities.

Average rack power density in Australian data centers currently ranges from 10 kW to 12 kW per rack and is expected to increase significantly by 2030 as AI, ML, IoT and big data applications require higher-density computing environments. Data centers use racks ranging from 36U to 52U, with a standard width of 19 inches. The 42U format remains the most widely deployed because it supports a broad range of server configurations.

Key Australia Data Center Colocation Market Findings

Recent Data Center Investments and Developments

Technology and Infrastructure Trends

Demand for AI and digitalization services continues to reshape Australia's colocation data center market. In November 2025, Harbor Solutions and Zadara launched a sovereign AI cloud platform using Nvidia GPUs for customers in Australia and New Zealand. The in-country, multi-tenant platform provides secure storage, compute and networking capabilities for sovereign and high-performance AI workloads.

Continued 5G deployment is also increasing demand for edge data centers and low-latency digital infrastructure. The Australian Communications and Media Authority supports this transformation through oversight of telecommunications infrastructure, services and digital content.

Investment in big data and IoT infrastructure remains another significant market driver. In February 2025, Services Australia extended its $141.7 million contract with Canberra Data Centres, demonstrating demand for secure, high-capacity infrastructure capable of supporting government data and real-time digital services.

Government tax incentives, digital strategies, sustainability programs, regulatory frameworks and strategic partnerships are strengthening Australia's position as an APAC digital infrastructure hub. These initiatives are designed to attract domestic and international investment while improving security, operating efficiency and environmental performance.

Energy and Sustainability Challenges

High power consumption and environmental pressure remain major restraints for the Australia data center colocation market. Data centers account for approximately 2% of Australia's grid-supplied electricity. The 2026 Oxford Economics/AEMO outlook forecasts National Electricity Market data center consumption to increase from 5.1 TWh in FY2026 to 15.5 TWh by FY2030 as new campuses and expansions become operational.

Colocation Demand and Revenue Outlook

The cloud & IT sector's 73% share of colocation demand in 2025 was driven by enterprise cloud migration, hyperscale adoption, AI, machine learning and broader digitalization programs. Wholesale colocation accounted for more than 66% of revenue as hyperscale and cloud service providers increasingly relied on large-capacity third-party facilities.

Demand for wholesale capacity is expected to strengthen as enterprises transfer more data and workloads to cloud platforms and deploy AI, IoT and big data technologies. This transition will create opportunities for operators capable of delivering scalable power, connectivity, security and high-density infrastructure.

Competitive Landscape

Established Australia data center colocation operators include 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 and Fujitsu.

New and expanding operators include Quinbrook Infrastructure Partners, Goodman, GreenSquareDC, IFM Investors, ISPT, Centuria Industrial REIT, Stockland, DOMA Infrastructure Group, Vantage Data Centers and MARKHAM.

Report Coverage

The research is intended for data center Real Estate Investment Trusts (REITs), construction contractors, infrastructure providers, new entrants, consultants, advisory firms, corporate organizations and government agencies. It also addresses expected utilized IT power capacity by 2031, existing and upcoming facility counts, market entrants and the principal factors driving Australia's colocation industry.

Key Topics Covered

1. ABOUT THE ANALYST

2. DATA CENTER CAPABILITIES

3. RESEARCH METHODOLOGY

4. MARKET SCOPE

5. MARKET DEFINITIONS

6. MARKET SNAPSHOT

7. SUPPLY & DEMAND ANALYSIS

8. MARKET GROWTH FACTORS

9. COLOCATION REVENUE & PRICING ANALYSIS

10. MARKET DYNAMICS

11. COMPETITIVE LANDSCAPE

12. QUANTITATIVE SUMMARY

A selection of companies mentioned in this report includes, but is not limited to:

For more information about this report visit https://www.researchandmarkets.com/r/m1sors

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