Australia Data Center Colocation Market - Supply and Demand
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
The cloud & IT sector represented approximately 73% of Australia's colocation demand in 2025.
Wholesale colocation generated more than 66% of total market revenue in 2025.
AirTrunk led the market by colocation revenue, while NEXTDC and Equinix also held notable positions.
The report covers 145 existing facilities and identifies 65 upcoming facilities across more than 20 cities.
Recent Data Center Investments and Developments
In September 2026, NVIDIA collaborated with Australian NVIDIA Cloud Partners and AI infrastructure partners, including Firmus, Sharon AI, IREN, ResetData, Megaport, CDC, NEXTDC and AirTrunk. The initiative is designed to expand land, power and shell capacity for multiple generations of NVIDIA DSX compute infrastructure, with up to a 2GW buildout by 2027.
In September 2026, Anthropic signed a lease for a planned 2.16 GW data center campus in Queensland developed by Zerra DC. Phased operations are expected to begin in 2027.
In August 2026, DoverDC submitted an application for the SM1B data center in Melbourne, with planned IT capacity of 200 MW.
In April 2025, DCI Data Centers announced plans for a Canberra facility covering approximately 62.7 thousand square feet.
In April 2025, STACK Infrastructure planned a Sydney data center with approximately 450MW of power capacity, while Goodman proposed a Sydney campus with combined IT capacity of around 90MW.
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
Australia data center colocation revenue forecasts for 2025-2031