South Africa Data Center Colocation Market - Supply And Demand Analysis And Forecast 2026-2031 AI, Cloud, And Connectivity Investments Fuel 12.09% CAGR Through 2031
Dublin, Oct. 07, 2026 (GLOBE NEWSWIRE) -- "South Africa Data Center Colocation Market - Supply & Demand Analysis 2026-2031" has been added to ResearchAndMarkets.com's offering.
The South Africa data center colocation market is projected to grow at a CAGR of 12.09% from 2025 to 2031, supported by cloud adoption, artificial intelligence, enterprise digitalization, data sovereignty requirements, and expanding international connectivity. By 2031, utilized data center area is expected to reach 2.07 million square feet, while utilized rack capacity is forecast to total 55.91 thousand units.
South Africa remains one of Africa's largest and most established data center markets. Johannesburg and Cape Town are the primary development hubs, attracting investment from major operators such as Teraco (Digital Realty), Africa Data Centres, Vantage Data Centers, Equinix, Digital Parks Africa, and Open Access Data Centres. Government investment incentives and Special Economic Zones are also supporting new data center construction and foreign investment.
Recent South Africa Data Center Market Developments
- In November 2025, Teraco, a Digital Realty company, completed the expansion of its CT2 data center facility in Cape Town, bringing the site's IT power capacity to approximately 50MW. In March 2025, Teraco signed a PPA with South African energy aggregator NOA to supply wind energy to its data centers, with initial delivery expected in 2026. In March 2025, Vantage Data Centers partnered with Attacq to develop a Johannesburg data center backed by an investment of approximately $34 million. As of January 2026, Uptime Institute records indicated that approximately eight South African data center facilities in the design or construction stage had received Tier III certification, while around four had received Tier IV accreditation. As of March 2026, approximately 10 data center projects were under construction, planned, or announced across the country.
Artificial Intelligence and Digitalization Drive Colocation Demand
Artificial intelligence is becoming a major growth catalyst for the South Africa data center colocation market. Operators are deploying AI-driven cooling, workload optimization, integrated monitoring, and high-density rack systems to support High-Performance Computing (HPC), cloud platforms, and enterprise digital transformation.
In March 2025, Cassava Technologies, the owner of Africa Data Centres, announced plans to establish an AI factory in South Africa by upgrading its facilities with Nvidia AI computing technology. Open Access Data Centres and Reflex have also partnered to deliver AI-ready data center infrastructure. Public-sector initiatives, including the AI Institute of South Africa and the National AI Policy Framework, are expected to encourage adoption across multiple industries.
Government investment is reinforcing this momentum. In July 2025, South Africa's Minister of Science, Technology, and Innovation announced approximately $28.4 million in funding for AI, blockchain, and other emerging technologies intended to strengthen foundational digital capabilities in the public sector.
Connectivity and Submarine Cable Investment
South Africa's international and inland connectivity infrastructure strengthens its position as a regional data center hub. As of November 2025, the country hosted approximately 11 operational submarine cables, including 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).
Two additional submarine cable systems are expected to become operational during the forecast period. In November 2025, Seacom announced an investment of approximately $2 billion in the Seacom 2.0 submarine cable connecting Africa, Europe, and Asia. The project is planned in four phases, including an extension from Kenya to South Africa.
Market Segmentation Insights
The cloud & IT sector accounted for approximately 70% of South Africa's total colocation demand in 2025. Its leading position reflects rising demand for cloud services, hybrid infrastructure, scalable computing capacity, and locally hosted data.
Wholesale colocation represented the largest share of South Africa data center colocation revenue in 2025. Demand is projected to expand through 2031 as cloud providers and large enterprises increasingly adopt long-term, high-capacity leases. Wholesale facilities allow organizations to scale infrastructure while avoiding the capital expense associated with constructing and operating dedicated data centers.
Industry Challenges
Power reliability remains a key constraint for South African data center operators. The electricity system continues to face outages and load shedding, while coal-fired generation accounted for approximately 81% of national electricity output during the first half of 2025, according to the National Energy Regulator of South Africa (NERSA). Renewable energy supplied approximately 8%, followed by nuclear power at 4%, imports at 3%, and gas at 3%.
The shortage of qualified professionals in data engineering, cloud architecture, data security, AI/ML, and cloud computing also presents an operational challenge. Industry demand is advancing faster than the availability of experienced talent, increasing the need for specialized education, practical training, and workforce development.
South Africa Data Center Colocation Market Report Coverage
- Market forecasts for utilized white floor area, IT power capacity, rack capacity, and occupancy% Core & Shell Vs Installed Vs Utilized IT Power Capacity analysis Colocation demand by industry, including Cloud/IT and BFSI Retail and wholesale colocation revenue forecasts for 2025-2031 Retail colocation pricing, Addons, and wholesale pricing trends Cloud operations, sustainability initiatives, and submarine cable developments Competitive share analysis based on revenue and MW capacity Profiles of existing and upcoming third-party data center facilities Coverage of 55 existing facilities, 10 upcoming facilities, and more than 25 cities
Vendor Landscape
Existing colocation operators covered in the report include Teraco (Digital Realty), Africa Data Centres, Digital Parks Africa, Vantage Data Centers, Equinix, Open Access Data Centres, and other providers. The Cavaleros Group is identified among the new market entrants.
Key Questions Answered
How many existing and upcoming colocation data center facilities are located in South Africa? How much IT power capacity is expected to be utilized by 2031? Which factors are driving South Africa data center colocation market growth? How will retail and wholesale colocation revenue develop between 2025 and 2031? Which operators lead the market by revenue and IT power capacity? Key Topics Covered
1. ABOUT THE ANALYST
2. ABOUT OUR DATA CENTER CAPABILITIES
3. RESEARCH METHODOLOGY
4. MARKET SCOPE
5. MARKET DEFINITIONS
6. MARKET SNAPSHOT:
- Colocation Market Snapshot
7. SUPPLY & DEMAND ANALYSIS:
- Existing vs Upcoming Data Center Facilities List of Upcoming Data Center Projects Market by IT Power Capacity (Core & Shell, Installed & Utilized (MW)) Core & Shell, Installed & Utilized Data Center Power Capacity by States Colocation Demand by Industry Market by Utilized Area Market by Utilized Racks
8. MARKET GROWTH FACTORS:
- Factors Attracting Colocation Investment in South Africa Impact of AI in Data Center Industry in South Africa Market Sustainability Status in South Africa Cloud Connectivity Cloud On Ramps & Investment in South Africa Submarine Cables & Inland Connectivity
9. COLOCATION REVENUE & PRICING ANALYSIS:
- Colocation Market by Revenue Retail Vs Wholesale Colocation Retail Colocation Pricing and Addons Wholesale Colocation Pricing Key Pricing Trends
10. MARKET DYNAMICS:
- Key Trends in the Market Key Enablers / Drivers in the Market Key Restraints in the Market
11. COMPETITIVE LANDSCAPE:
- Competitive Landscape by Colocation Operators Market Share by Colocation Revenue Market Share by IT Power Capacity Existing Colocation Operators New Operators
12. QUANTITATIVE SUMMARY
A selection of companies mentioned in this report includes, but is not limited to:
- Teraco (Digital Realty) Africa Data Centres Digital Parks Africa Vantage Data Centers Equinix Open Access Data Centres Others The Cavaleros Group
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