Australia Colocation Market - Strategic Insights and Forecasts (2026-2031)

The Australia Colocation market is forecast to grow at a CAGR of 19.5%, reaching USD 11.7 billion in 2031 from USD 2.8 billion in 2026.

Australia Colocation Market Key Highlights:

The increasing number of data centers, favourable regulation coupled with good infrastructural facilities, and the high internet penetration rate in the country are majorly driving colocation market expansion in Australia.

Moreover, the favourable investments in the Internet of Things (IoT), growing internet traffic coupled with booming virtual entertainment, and online surfing have further bolstered the demand for colocation data centers for exercising efficient data storage and security.

Australia Colocation Market Growth Drivers:

• Rapid urbanization and digital innovation have propelled the market growth.

Data centers constitute one of the major parts of digital infrastructure, and with signs of future investment in digitization in Australia, especially in the corporate environment, the demand for colocation is expected to grow. Moreover, with the rapid urbanization and investments in digital innovations, the demand for appropriate digital infrastructure to store necessary data, especially for corporations, is anticipated to increase in Australia. According to the World Bank’s data, Australia’s urban population reached 22,491,671, which represented a 1.7% growth over the 2020 population figure. 

Additionally, investment to bolster industry 4.0, cloud computing, and virtual environment has provided a wider scope for the expansion of colocation services in the coming years.  

• Growing internet penetration is anticipated to drive market expansion. 

Australia’s internet penetration is witnessing an upward trajectory fueled by booming online transactions, be it for online shopping and day-to-day surfing.  According to the Australian Communication and Media Authority, in the first six months of 2023, 98% of Australian adults had home internet access, inclusive of 4G and 5G. Government initiatives in the IT sector, coupled with the development and emergence of 5G, are further expected to drive the colocation services throughout the forecast period.

Moreover, there is a surge in smartphone penetration and usage of smart devices, especially for going online. For instance, as per the Australian Communication and Media Authority, till June 2023, smartphones were the most used devices for adults to connect to the internet. The Capex (capital expenditure) investments in the country are also expected to boost the telecommunications industry, which has been projected to propel growth for the colocation market. 

Australia Colocation Market Key Developments:

• In August 2023: Colocation service provider STACK Infrastructure established its first Asia Pacific data center in Melbourne, Australia, and formed a part of STACK’s ongoing effort to expand its scaling digital infrastructure. 

• In April 2023: Engineering firm HDR Inc. developed “M3 Melbourne” and “M2 Melbourne” data centers that are designed to provide desired power to enterprises, government, and critical IT infrastructure in Melbourne.

• In September 2022: Amber Infrastructure Group acquired Australia-based data center operator YourDC, which operates South Australia’s largest cloud and managed service ecosystem and provides colocation services to defense, education, government, and enterprises. 

Australia Colocation Market Scope: