In the second half of 2024, the average monthly per kilowatt rent of data centers in the Silicon Valley in the United States was between *** U.S. dollars and *** U.S. dollars. Northern Virginia, which is the market with the largest data center inventory and the most new capacity under construction, had monthly rent between *** and *** U.S. dollars.

The average data center rental cost in Europe in the second half of 2023 declined slightly, after soaring in the same period a year ago. A 10 kW lease cost approximately ***** U.S. dollars per kW, up from ***** U.S. dollars per kW at the beginning of 2022.

Renting data center space in the United States has been becoming increasingly pricier since 2021. Fueled by soaring demand due to the rise of artificial intelligence (AI), the average monthly rent per kilowatt increased from ****** U.S. dollars in 2021 to ****** U.S. dollars in 2024.

In the first quarter of 2024, data centers in Singapore's monthly rental price (excluding electricity cost) ranged from *** to *** U.S. dollars per kilowatt-hour. In comparison, data centers in Sydney, Australia's monthly rental rate started at *** U.S. dollars per kilowatt-hour.

The global load bank rental market, encompassing data centers, is experiencing robust growth, projected to reach a substantial size due to the increasing demand for reliable power testing and emergency backup systems. The market's 5.3% CAGR from 2019-2024 indicates consistent expansion, fueled by several key drivers. The surge in data center construction and expansion, particularly in regions like North America and Asia-Pacific, is a primary factor. Furthermore, stringent regulatory compliance requirements for ensuring data center uptime and preventing costly outages are driving the adoption of load bank rental services. The rising adoption of cloud computing and edge data centers further intensifies the demand for thorough power system testing, boosting the market. Different types of load banks, including resistive, reactive, and combined resistive/reactive systems, cater to diverse testing needs within data centers. Competition among established rental companies like United Rentals, Aggreko, and others fuels innovation and price competitiveness, benefiting end-users. The market segmentation reveals a significant presence of the Internet industry, government bodies, and telecommunication firms as key consumers of load bank rental services for their data centers. While the BSFI and transportation sectors also contribute, the Internet industry's substantial investment in data infrastructure drives significant demand. Geographic analysis suggests North America and Europe currently hold a substantial market share, though rapidly expanding economies in Asia-Pacific are poised to witness significant growth in the coming years. Factors such as increasing awareness of power system vulnerabilities, growing adoption of renewable energy integration within data centers, and the need for efficient testing methodologies will continue to propel market expansion throughout the forecast period (2025-2033). This necessitates a strategic approach by rental companies to meet the growing demand for customized load bank solutions and advanced testing services for diverse data center requirements.

The average monthly rental rate for data center capacity in primary markets in the United States rose sharply to over *** U.S. dollars per kilowatt in the first half of 2024. The surge in rental rates reflects the increasing pressure on data center capacity due to rising demand and supply chain constraints. Northern Virginia leads the U.S. data center market As of the second half of 2023, the Northern Virginia region boasted the lowest data center vacancy rate among major markets in North America at just *** percent. Spread across Loudon, Fairfax, Fauquier, and Prince William Counties, the region has long been a leading data center hub, with hyperscale operators attracted by favorable local infrastructure conditions and proximity to major metropolitan areas. Challenges and opportunities in data center construction The second half of 2023 saw ***** megawatts of data center capacity under construction in Northern Virginia. However, the market could face limitations in future expansion, with the growing impact on local resources prompting local officials to rethink approaches to data center planning processes. Meanwhile, the Portland and Eastern Oregon region has emerged as an important west coast hub. Sometimes referred to as the Silicon Forest, the region has a reported *** megawatts under construction as of the second half of 2023.

The global load bank rental market, projected at $47 million in 2025, is experiencing robust growth, driven by the increasing demand for reliable power testing and commissioning in data centers. The expanding data center infrastructure globally, coupled with stringent regulatory compliance requirements for power system reliability, fuels the need for sophisticated load bank rental services. The rising adoption of cloud computing and edge computing further intensifies this demand, as these technologies require robust power infrastructure to ensure continuous uptime and prevent costly outages. Within the data center segment, the demand for resistive and reactive load banks is particularly high, reflecting the need for comprehensive testing that simulates diverse power loads. Major players in the rental market, including United Rentals, Aggreko, and ComRent, are strategically expanding their service offerings and geographic reach to capitalize on this burgeoning opportunity. The North American market currently holds a significant share, owing to the high concentration of data centers in the region, but Asia-Pacific and Europe are witnessing rapid growth, fueled by increasing data center construction and digital transformation initiatives. A steady Compound Annual Growth Rate (CAGR) of 5.3% is anticipated over the forecast period (2025-2033), indicating a promising outlook for the load bank rental market within the data center sector. The competitive landscape is characterized by both large, multinational rental companies and specialized providers focusing on load bank rental services. Differentiation strategies often revolve around specialized expertise in data center load testing, advanced equipment offerings (including integrated monitoring and control systems), and superior customer service. The market is also witnessing a shift toward digitalization, with online platforms and streamlined booking processes becoming increasingly prevalent. Future growth will be influenced by factors such as technological advancements in load bank technology (e.g., increased efficiency and portability), the growing adoption of renewable energy sources (which necessitate thorough testing), and ongoing efforts to improve data center energy efficiency. Regulatory pressures related to data security and power reliability also play a significant role in shaping market dynamics.

The global load bank rental market for data centers is experiencing robust growth, projected to reach a market size of $47 million in 2025, exhibiting a compound annual growth rate (CAGR) of 5.3% from 2019 to 2033. This expansion is fueled by several key factors. The increasing reliance on data centers for critical infrastructure and cloud computing services necessitates rigorous testing and maintenance of backup power systems. Load bank rentals offer data centers a cost-effective solution for this, eliminating the need for large capital expenditures on equipment used infrequently. Furthermore, the rising adoption of renewable energy sources within data center operations is also contributing to growth, as load banks become crucial for testing the reliability and performance of these new power systems. Stringent regulatory compliance requirements related to data center uptime and disaster recovery further incentivize the rental of load banks to ensure continuous operation. Major players such as United Rentals, Sunbelt Rentals, and Aggreko are actively shaping the market landscape through strategic expansion and service innovations. The forecast period (2025-2033) anticipates sustained growth, driven by the ongoing digital transformation and the escalating demand for high-availability data center infrastructure. Geographically, North America and Europe currently dominate the market, though emerging economies in Asia-Pacific are demonstrating significant growth potential due to increasing investments in data center infrastructure. However, the market faces potential restraints, including the high initial cost of advanced load bank technology and the cyclical nature of the data center construction industry. Despite these challenges, the long-term outlook for the load bank rental market within the data center sector remains positive, driven by the inherent need for reliable and efficient power testing and the cost-effectiveness of rental solutions.

The size of the US Multi-Tenant (Colocation) Data Center market was valued at USD XX Million in 2023 and is projected to reach USD XXX Million by 2032, with an expected CAGR of 10.89% during the forecast period.The US multi-tenant data center market in colocation is growing rapidly, and it will reach a notable valuation in the coming years. It is when third-party service providers offer a business the option to rent space, network bandwidth, and other essential data center resources within a shared facility. In this model, several advantages come into play: cost-effectiveness, enhanced scalability, and access to advanced infrastructure and security measures.Multi-tenant data centers are advantageous to businesses wanting to expand their IT operations but not willing to make the big capital investment for building and maintaining their own data centers. Multi-tenant data centers cater to various industries: SMEs to large corporations, as well as cloud service providers. The increasing requirement for cloud computing due to infrastructural changes, developing application needs for data storage and processing, and its demand to align businesses to the shifting digital landscape give momentum to the market. Recent developments include: In September 2023, A Full-Stack Cloud Service Provider, Expedient, partnered with Kyndryl, the world's largest IT infrastructure services provider. Through this collaboration, Expedient's robust data center colocation and cloud infrastructure will enhance Kyndryl's industry-leading cyber resilience offerings to customers. This partnership will enable Expedient and Kyndryl to extend the reach and effectiveness of security and cyber resilience services to a broader range of customers, helping organizations across various industries strengthen and fortify their cybersecurity posture while mitigating the risks associated with data breaches., In July 2023, Ubiquity, a digital infrastructure investor, announced the acquisition of edgepresence, a pioneer in the build-to-suit edge data center industry, delivering turnkey, localized, and scalable network compute solutions for carriers and data hyperscalers. Edgepresence's Edge Data Centers (EDCs) are modular, purpose-built data centers efficiently designed to include critical power, monitoring, physical security, and cooling. Complementing Ubiquity's existing digital infrastructure, EDCs enable far-edge functions, minimizing latency and improving performance for network tenants in a highly secure facility that can be deployed in weeks.. Key drivers for this market are: Growing Adoption of Cloud Services is expected to flourish the market, Increasing Growth in Wholesale Datacenter Multi-tenant Spaces to propel demand (albeit from a lower base); Increased Emphasis on Compliance with Data Regulations and Cost-Effective Nature of Multi-tenant Facilities to Drive Adoption among SME's. Potential restraints include: Dependence on Regulatory Landscape & Stringent Security Requirements. Notable trends are: Healthcare Sector Accounts for Significant Share.

Leasing Information includes information on the status of leases along with the geographic locations, effective date, surface acreage and other data elements specific to the lease. Lease Owner details lease ownership by percentage and includes the company who is the designated lease operator.

As of the first quarter of 2024, data centers in Frankfurt had higher rental rates than in London or Paris. Meanwhile, data centers with a capacity of *** to *** kW in Amsterdam had relatively lower monthly rental rates, ranging from *** U.S. dollars per kW to *** U.S. dollars per kW.

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Data Center Colocation Market Size 2025-2029

The data center colocation market size is forecast to increase by USD 78.56 billion, at a CAGR of 15.2% between 2024 and 2029.

The market is experiencing significant growth due to the increasing demand for secure and efficient IT infrastructure solutions. Companies are seeking colocation services to house their IT equipment in specialized facilities, enabling them to focus on their core business while benefiting from advanced technology and expertise. Innovative cooling solutions are emerging to address the challenge of managing heat generation in densely packed data centers, ensuring optimal performance and energy efficiency. Furthermore, containerized data centers are gaining traction as a flexible and cost-effective alternative to traditional colocation facilities, offering rapid deployment and scalability. However, the market faces challenges such as security concerns, power consumption, and the need for interconnectivity and bandwidth to support growing data traffic. Companies must navigate these obstacles by implementing robust security measures, optimizing energy usage, and investing in high-speed connectivity solutions to capitalize on the opportunities presented by the evolving data center colocation landscape.

What will be the Size of the Data Center Colocation Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019-2023 and forecasts 2025-2029 - in the full report.
Request Free SampleThe market continues to evolve, driven by the increasing demand for advanced IT infrastructure solutions. Colocation facilities offer businesses the benefits of housing their IT equipment in secure, specialized environments, enabling them to focus on their core competencies. These facilities provide essential components such as cooling systems, green data centers, fire suppression systems, managed services, cloud connectivity, data storage, disaster recovery, object storage, security systems, and business continuity. Cooling systems ensure optimal operating temperatures, while green data centers minimize the carbon footprint. Fire suppression systems and physical security safeguard against potential threats. Managed services offer technical support and capacity planning, while cloud connectivity and network connectivity enhance access to cloud infrastructure. Data storage solutions cater to various needs, from traditional to object storage. Disaster recovery and business continuity plans ensure data availability and minimize downtime. Moreover, the integration of big data analytics, machine learning, and artificial intelligence into data center infrastructure enhances efficiency and performance. Energy efficiency is a key concern, with renewable energy and data center automation playing significant roles. Hybrid cloud solutions and network switches enable seamless integration of on-premises and cloud resources. The market dynamics continue to unfold, with edge computing gaining traction and software-defined networking, network-attached storage, and UPS systems enhancing network performance and reliability. The ongoing evolution of IT infrastructure management requires constant monitoring and adaptation to meet the ever-changing needs of businesses.

How is this Data Center Colocation Industry segmented?

The data center colocation industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. TypeRetail colocationWholesale colocationEnd-userSmall and medium sized enterprisesLarge enterprisesGeographyNorth AmericaUSCanadaEuropeFranceGermanyItalyUKAPACChinaIndiaJapanSouth AmericaBrazilRest of World (ROW)

By Type Insights

The retail colocation segment is estimated to witness significant growth during the forecast period.In the realm of IT infrastructure, retail colocation data centers have emerged as a popular solution for businesses seeking to reduce capital expenditures (CAPEX) and operational expenditures (OPEX). These facilities offer enterprises the opportunity to rent rack space, cages, and private suites in large data centers, where they can house their servers and storage devices. The market for retail colocation is thriving, driven by the growing preference among Small and Medium Enterprises (SMEs) for this cost-effective solution. Environmental monitoring, access control, and security systems are integral components of these facilities, ensuring optimal conditions for IT equipment and data protection. UPS systems, cooling systems, and fire suppression systems maintain uninterrupted power and temperature conditions, while managed services and cloud connectivity facilitate seamless data access and disaster recovery. Energy efficiency and sustainability are essential

In the first half of 2020, the rental price of retail colocation space in Tokyo, Japan, was between 227 and 278 U.S. dollars per month. Pricing in hyperscale cloud and wholesale colocation was less expensive, with monthly rent between 128 and 157 U.S. dollars for hyperscale, and 179 and 218 U.S. dollars for wholesale colocation. Hyperscale data centers have the largest power requirements and customers are usually a cloud or large tech company. Wholesale and retail colocation, on the other hand, have smaller power requirements.

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Western Europe Data Center Colocation Market Size 2025-2029

The Western Europe data center colocation market size is forecast to increase by USD 14.14 billion, at a CAGR of 19.1% between 2024 and 2029.

The market is experiencing significant growth due to the increasing demand for reliable and efficient data center solutions. Key trends in the market include innovative approaches such as the development of submarine data centers, which offer enhanced connectivity and disaster recovery capabilities. Additionally, there is a focus on data center consolidation, as businesses look to reduce costs and improve operational efficiency. These trends are driving the growth of the market, making it an attractive investment opportunity for businesses in need of secure and scalable data center solutions. Furthermore, the use of advanced technologies like artificial intelligence and machine learning is expected to further boost market growth, as these technologies require large amounts of data processing power and storage capacity. Overall, the market is poised for continued growth, offering numerous opportunities for businesses seeking to optimize their IT infrastructure and improve their digital capabilities.

What will be the Size of the market During the Forecast Period?

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The market continues to experience strong growth, driven by the increasing demand for secure and reliable infrastructure to support the expanding digital economy. With the proliferation of cloud platforms like Microsoft Azure and the growing importance of data protection regulations such as GDPR, data centers have become essential infrastructure for businesses seeking to manage their data and comply with evolving data protection requirements. This trend is particularly pronounced In the Nordic region, where economic growth and the adoption of artificial intelligence and automation technologies are driving data generation and the need for advanced colocation solutions.
The market is expected to reach significant colocation revenue figures, as businesses continue to prioritize Opex-friendly infrastructure solutions and seek to optimize their IT operations. The market is characterized by a diverse range of players, from established providers like Equinix and Interxion to emerging players in the Nordics, such as Data4 and others. The market is also witnessing the integration of advanced technologies like AI and pattern recognition into colocation offerings, as part of national AI strategies and the broader tech markets' evolution.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Retail colocation
  Wholesale colocation


End-user

  Small and medium sized enterprises
  Large enterprises


Industry Application

  Retail
  BFSI
  IT and telecom
  Healthcare
  Others


Business Segment

  Tier 1
  Tier 2
  Tier 3
  Tier 4


Geography

  Western Europe

By Type Insights

The retail colocation segment is estimated to witness significant growth during the forecast period.

Colocation is a data center solution where businesses rent space to house their IT infrastructure within a third-party facility. Retail colocation, specifically, involves enterprises leasing racks, cage spaces, or private suites within large data centers for one to three years. This trend is gaining traction among Small and Medium Enterprises (SMEs) due to the cost savings from reduced Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) compared to managing in-house data centers. The growth of retail colocation is driven by the escalating costs of building and maintaining traditional data centers. European cities such as Reykjavik, Milan, Warsaw, Prague, Vienna, Madrid, and Oslo are popular destinations for colocation due to their strategic locations, economic growth, and tech markets.

Compliance with regulations like GDPR and Data Protection acts is another factor driving demand for colocation services. Furthermore, the integration of Artificial Intelligence, automation, and pattern recognition technologies in data centers is fueling innovation. The European Green Deal and the European climate pact's focus on carbon neutrality are also influencing data center infrastructure investments. Tax incentives and policies such as the Local Digital Declaration, Technology Code, and Cloud First Policy are further boosting the colocation market.

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Market Dynamics

Our Western Europe Data Center Colocation Market researchers analyzed the data with 2024 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers w

The Northern California data center market is experiencing robust growth, fueled by several key factors. The region's established technology hub, abundant renewable energy sources, and strong digital infrastructure make it an attractive location for hyperscale cloud providers, large enterprises, and smaller businesses alike. The concentration of major technology companies in Silicon Valley and surrounding areas drives significant demand for colocation services and wholesale data center capacity. While the exact market size for Northern California in 2025 is unavailable, a reasonable estimate can be derived by considering the overall market size (XX million) and applying a proportional allocation based on the concentration of tech giants and data center infrastructure in the region. Given the global CAGR of 8.50%, and assuming Northern California's market growth mirrors or slightly exceeds the global average due to its unique strengths, a conservative estimate of the 2025 market size could be in the range of $15-20 billion. This figure is further supported by the presence of major data center operators like Digital Realty Trust, Equinix (though not explicitly listed, a major player), and others actively investing and expanding in the region. Growth is projected to continue throughout the forecast period (2025-2033), driven by increasing cloud adoption, the rise of edge computing, and the growing need for low-latency data processing. However, constraints such as land availability, energy costs, and competition for skilled labor could moderate growth. Segmentation within the market reveals strong demand across all DC sizes, with a particular focus on large and hyperscale facilities catering to the needs of major cloud providers. The utilized capacity segment, particularly the hyperscale and wholesale colocation types, is expected to exhibit the highest growth rates. Furthermore, demand will likely be geographically concentrated around major tech hubs within Northern California, with Tier 1 and 2 cities experiencing disproportionately high growth compared to Tier 3 and 4 areas. This highlights the importance of strategic location selection for both data center operators and businesses seeking colocation services. Recent developments include: October 2022: Northern California, also known as Silicon Valley, ranked second for Data Center leasing activity in the first half of 2022. The region increased its capacity by 10% supply in H1 2022. However, it experienced record-low vacancy at 1.3%; silicon valley remains the tightest data center market in the U.S., April 2023: RICloud entered the data center market in San Jose in 2021. Silicon Valley now has 17 similar facilities under construction in the region. This has increased the capacity of silicon valley by a whopping 688MW which is in the works., January 2022: Prime Data Centers publicized its plans for the site on Comstock Street in Santa Clara, next to its current assets. The construction is anticipated to begin in the second half of 2023; the facility is expected to have a total of 9MW capacity at 74,000 sf.. Notable trends are: Growing cloud applications, AI, and Big Data are expected to fuel the market growth.

The Data Center Colocation Market size was valued at USD 61.47 billion in 2023 and is projected to reach USD 155.71 billion by 2032, exhibiting a CAGR of 14.2 % during the forecasts period. The data center colocation market can be described as the rental of IT space, power, and cooling from providers other than the company operating the equipment. The solutions are used to leverage, protect and achieve efficient operating without constructing their own centers by businesses. Some of the typically occurring purposes include housing of sensitive applications, backup, and recovery, and continuity of business. As for the existing trends in the market, practitioners apply edge computing to minimize latency for end-users. There is also an emerging aspect of green data centre which tends to centre on energy efficiency and environmental legislative compliance. Other related factors influencing the evolution of market for this product include availability of connectivity option including high speed network and interconnectivity services.

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In the first half of 2020, the rental price of retail colocation space in Hong Kong was between *** and *** U.S. dollars per month. Pricing in hyperscale cloud and wholesale colocation was less expensive, with monthly rent between *** and *** U.S. dollars for hyperscale, and *** and *** U.S. dollars for wholesale colocation. Hyperscale data centers have the largest power requirements and customers are usually a cloud or large tech company. Wholesale and retail colocation, on the other hand, have smaller power requirements.

The size of the Data Center Colocation Market was valued at USD XX USD million in 2023 and is projected to reach USD XXX USD million by 2032, with an expected CAGR of 7.9% during the forecast period. Data center colocation is a service where businesses rent physical space in a third-party data center to house their IT infrastructure, such as servers, storage systems, and networking equipment. Instead of maintaining their own private data centers, companies can take advantage of the colocation provider's facilities, which offer secure environments with advanced features like reliable power supplies, cooling systems, high-speed internet connectivity, and robust physical security. Colocation allows businesses to focus on their core operations while outsourcing the complex tasks of infrastructure management, maintenance, and security to the provider. This service is ideal for companies that need scalable, high-performance infrastructure but want to avoid the costs and responsibilities associated with building and managing their own data center. The growth is primarily driven by increasing demand for cost-effective and scalable data storage and management solutions. The adoption of cloud computing, big data analytics, and the Internet of Things (IoT) is also contributing to the market growth. Key drivers for this market are: Increasing Adoption of Cloud-based Managed Services to Drive Market Growth. Potential restraints include: Misuse of Virtual Currency and Security Attacks Confines the Adoption of Cryptocurrencies. Notable trends are: Growing Implementation of Touch-based and Voice-based Infotainment Systems to Increase Adoption of Intelligent Cars.