South Africa Data Center Colocation Market - Supply and

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