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.

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.

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.

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.

Snapshot img

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?

Request Free Sample

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.

Get a glance at the market report of share of various segments Request Free Sample

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 will

The cost of renting data center space in the United States has soared since 2020. In 2024, the average asking per kilowatt rose by **** percent, marking the third consecutive year of double-digit increase. Escalating costs for power, labor, and equipment were some of the main reasons for the price increase.

The booming data center industry fuels explosive growth in the load bank rental market. Learn about market size, key players (United Rentals, Sunbelt Rentals), trends, and forecasts for 2025-2033. Discover how this cost-effective solution ensures data center power system reliability and compliance.

Northern Virginia is by far the largest data center market in the United States when measured by total inventory. The region had capacity of almost ***** megawatts in the second half of 2024, up twelve percent on the previous year. The Atlanta region had the second-highest capacity, followed by Chicago. Northern Virginia could face a slowdown in construction Situated close to major east coast urban centers, the Northern Virginia region is considered a key hyperscale data center hub. The region had a reported ***** megawatts of data center capacity under construction as of the second half of 2024, far more than any other U.S. market. However, future expansion may be hindered by shifting local infrastructure conditions, with the growing impact of large-scale facilities leading local decision makers to reassess planning legislation. Rental rates on the rise The average monthly rental rate for data center capacity in primary U.S. markets surged to over **** per kilowatt in 2024. This is partially due to increased demand, with digital transformation driving the adoption of cloud services, and with the adoption of data intensive artificial intelligence (AI) applications. However, data centers operators are also experiencing difficulties in data center construction, as rising utilities costs and supply chain continue to apply pressure.

Snapshot img

Data Center Colocation Market Size 2025-2029

The data center colocation market size is valued to increase USD 78.56 billion, at a CAGR of 15.2% from 2024 to 2029. Rising demand for data center colocation facilities will drive the data center colocation market.

Major Market Trends & Insights

North America dominated the market and accounted for a 32% growth during the forecast period.
By Type - Retail colocation segment was valued at USD 19.81 billion in 2023
By End-user - Small and medium sized enterprises segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 299.25 billion
Market Future Opportunities: USD 78562.90 billion
CAGR : 15.2%
North America: Largest market in 2023

Market Summary

The market is a continually evolving landscape shaped by advancements in core technologies and applications. With the increasing reliance on cloud computing and the Internet of Things (IoT), the demand for data center colocation facilities has surged. According to a recent study, the global colocation market is expected to account for over 40% of the total data center market by 2025. Innovative approaches for cooling colocation services have gained significant traction, with liquid cooling and containerized data centers emerging as popular solutions. These advancements address the challenges of managing increasing power densities and maintaining optimal operating temperatures. Moreover, regulatory compliance and security concerns continue to influence market dynamics, driving demand for robust and secure colocation services.
As businesses seek to optimize their IT infrastructure and reduce operational costs, the market for colocation services is poised for continued growth. By offering flexible, scalable, and cost-effective solutions, colocation providers are meeting the evolving needs of businesses across various industries.

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

Get Key Insights on Market Forecast (PDF) Request Free Sample

How is the Data Center Colocation Market Segmented and what are the key trends of market segmentation?

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.

Type

  Retail colocation
  Wholesale colocation


End-user

  Small and medium sized enterprises
  Large enterprises


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  APAC

    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By Type Insights

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

In the dynamic and evolving data center landscape, retail colocation has emerged as a popular choice for businesses seeking cost savings and improved operational efficiency. This market trend is driven by the increasing adoption of retail colocation data centers by Small and Medium Enterprises (SMEs), who are looking to reduce both capital expenditure (CAPEX) and operational expenditure (OPEX) by renting space for their IT infrastructure in large data centers. The retail colocation market is witnessing significant growth as businesses opt for this solution to avoid the high costs associated with owning and maintaining traditional in-house data centers. According to recent studies, retail colocation adoption has risen by 18%, and the market is projected to expand further, with expectations of a 25% increase in industry growth in the upcoming years.

Power distribution units, uninterruptible power supplies, and redundant power systems are essential components of retail colocation facilities, ensuring reliable and uninterrupted power supply. Virtualization technologies, network infrastructure design, and physical security systems are other key elements that contribute to the overall efficiency and security of these data centers. Colocation facility selection, facility management practices, and uptime service level agreements (SLAs) are crucial factors that businesses consider when choosing a retail colocation provider. Power usage effectiveness, cooling system efficiency, and rack space utilization are essential aspects of operational efficiency improvements. Compliance regulations adherence, such as HIPAA, SOC 2, and PCI DSS, is a significant concern for businesses in various sectors, making it essential for retail colocation providers to offer robust security access control, environmental monitoring, and disaster recovery planning.

Request Free Sample

The Retail colocation segment was valued at USD 19.81 billion in 2019 and showed a gradual increase during the forecast period.

Cloud conn

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 IT Equipment Rental Service market is experiencing robust growth, driven by increasing demand for flexible IT infrastructure solutions and a shift towards operational expenditure (OPEX) models over capital expenditure (CAPEX). Businesses, particularly small and medium-sized enterprises (SMEs), are increasingly adopting rental services to avoid upfront capital investments in hardware, enabling them to access cutting-edge technology without significant financial burdens. This trend is amplified by the rising adoption of cloud computing and the need for scalable IT resources to handle fluctuating workloads. The market is further propelled by advancements in virtualization and server technology, allowing for efficient resource utilization and cost optimization within rental agreements. Key players like Evernex, Tech Quick Solutions, and Flex IT Rent are capitalizing on this demand by offering a diverse range of equipment, including servers, storage devices, networking gear, and peripherals, tailored to specific customer needs. Competitive pricing strategies and comprehensive service packages, including maintenance and support, are crucial differentiators in this market. However, potential restraints include economic downturns impacting IT spending and the risk of obsolescence in rapidly evolving technology. Despite these challenges, the market's positive trajectory is expected to continue, driven by the ongoing digital transformation across various sectors. The market segmentation likely includes variations in rental terms (short-term, long-term), equipment types (servers, storage, networking), and industry verticals (finance, healthcare, education). Geographical expansion into emerging markets presents a significant opportunity for growth, particularly in regions with rapidly expanding digital infrastructures. The increasing focus on sustainability and energy-efficient equipment is also shaping market dynamics, with environmentally conscious rental options becoming increasingly popular. Market consolidation through mergers and acquisitions is another potential trend to watch. We project a healthy Compound Annual Growth Rate (CAGR), implying continuous market expansion in the coming years.

The Load Bank Rental market for Data Centers is a vital segment within the broader infrastructure industry, playing a crucial role in ensuring that data centers can operate efficiently and reliably. Load banks are essential for testing and maintaining backup power systems, allowing facility managers to simulate elec

Taiwan Office Rent Listing Rate: TA: Ren'ai & Dunnan Road data was reported at 2,614.000 NTD/Ping in Mar 2018. This stayed constant from the previous number of 2,614.000 NTD/Ping for Dec 2017. Taiwan Office Rent Listing Rate: TA: Ren'ai & Dunnan Road data is updated quarterly, averaging 2,614.000 NTD/Ping from Sep 2013 (Median) to Mar 2018, with 19 observations. The data reached an all-time high of 2,631.000 NTD/Ping in Jun 2016 and a record low of 2,536.000 NTD/Ping in Sep 2013. Taiwan Office Rent Listing Rate: TA: Ren'ai & Dunnan Road data remains active status in CEIC and is reported by Taiwan Real Estate Research Center. The data is categorized under Global Database’s Taiwan – Table TW.EB027: Office Rent Index and Vacancy Rate: Taiwan Real Estate Research Center, Cathay Real Estate Development Company Ltd.

Taiwan CREI: Office Listing Rent Index: TA: Ren'ai & Dunnan Road data was reported at 98.000 2006-2008=100 in Dec 2010. This stayed constant from the previous number of 98.000 2006-2008=100 for Sep 2010. Taiwan CREI: Office Listing Rent Index: TA: Ren'ai & Dunnan Road data is updated quarterly, averaging 98.000 2006-2008=100 from Mar 2008 (Median) to Dec 2010, with 12 observations. The data reached an all-time high of 102.000 2006-2008=100 in Jun 2008 and a record low of 96.000 2006-2008=100 in Mar 2008. Taiwan CREI: Office Listing Rent Index: TA: Ren'ai & Dunnan Road data remains active status in CEIC and is reported by Taiwan Real Estate Research Center. The data is categorized under Global Database’s Taiwan – Table TW.EB027: Office Rent Index and Vacancy Rate: Taiwan Real Estate Research Center, Cathay Real Estate Development Company Ltd.

Taiwan Office Rent Listing Rate: TA: Dunbei & Minsheng Road data was reported at 2,628.000 NTD/Ping in Mar 2018. This stayed constant from the previous number of 2,628.000 NTD/Ping for Dec 2017. Taiwan Office Rent Listing Rate: TA: Dunbei & Minsheng Road data is updated quarterly, averaging 2,677.000 NTD/Ping from Sep 2013 (Median) to Mar 2018, with 19 observations. The data reached an all-time high of 2,719.000 NTD/Ping in Sep 2013 and a record low of 2,628.000 NTD/Ping in Mar 2018. Taiwan Office Rent Listing Rate: TA: Dunbei & Minsheng Road data remains active status in CEIC and is reported by Taiwan Real Estate Research Center. The data is categorized under Global Database’s Taiwan – Table TW.EB027: Office Rent Index and Vacancy Rate: Taiwan Real Estate Research Center, Cathay Real Estate Development Company Ltd.

The standby rental power market, valued at $3976.5 million in 2025, is projected to experience steady growth, driven primarily by increasing demand across diverse sectors. The rising adoption of temporary power solutions in construction, events, and emergency situations fuels this expansion. Furthermore, the growing need for reliable backup power in data centers and critical infrastructure, coupled with the increasing frequency of natural disasters and power outages, contributes significantly to market expansion. Technological advancements, such as the incorporation of more efficient and environmentally friendly generators, further enhance market appeal. While regulatory changes and fluctuations in fuel prices present some challenges, the overall market outlook remains positive. The Compound Annual Growth Rate (CAGR) of 4.3% from 2025 to 2033 indicates a consistent, albeit moderate, growth trajectory. This suggests a steady increase in market size, driven by the ongoing demand for reliable backup power solutions. Key players like Aggreko, APR Energy, Atlas Copco, Energyst, and United Rentals are well-positioned to capitalize on this growth, leveraging their existing infrastructure and expertise. Future expansion will likely focus on enhancing technological capabilities, geographic reach, and service offerings to cater to the evolving needs of diverse customer segments. Developing economies are expected to present significant opportunities for growth due to increasing infrastructure development and industrialization.

Rental UPS Market Outlook

According to our latest research, the global Rental UPS market size reached USD 1.42 billion in 2024, exhibiting steady expansion driven by increasing demand for reliable and flexible power backup solutions across diverse industries. The market is forecasted to grow at a robust CAGR of 7.8% from 2025 to 2033, reaching a projected value of USD 2.81 billion by the end of the forecast period. This growth is primarily fueled by the rising frequency of power outages, the proliferation of data centers, and the growing trend towards temporary and scalable power solutions for both planned and emergency situations.

One of the primary growth drivers for the rental UPS market is the escalating need for uninterrupted power supply in mission-critical environments. Sectors such as data centers, healthcare, manufacturing, and IT & telecom are increasingly reliant on continuous operations, where even a momentary power disruption can result in significant financial losses or compromise safety. The flexibility offered by rental UPS systems allows organizations to quickly adapt to fluctuating power needs, especially during events such as infrastructure upgrades, equipment maintenance, or emergency situations. As digital transformation accelerates globally, the dependency on electronic systems and automation further propels the demand for reliable, on-demand power backup solutions, making rental UPS an attractive option for enterprises seeking operational resilience without incurring substantial capital expenditure.

Another significant factor contributing to the expansion of the rental UPS market is the growing adoption of temporary power solutions for short-term projects and events. Industries such as construction, entertainment, and large-scale public gatherings require scalable and mobile power backup systems to ensure seamless operations. Rental UPS providers offer tailored solutions that cater to these dynamic requirements, eliminating the need for permanent installations and providing cost-effective alternatives. Additionally, the increasing prevalence of natural disasters and grid instability in certain regions underscores the importance of having readily available UPS systems on rent, enabling businesses to maintain critical functions during unforeseen disruptions. This trend is further supported by advancements in UPS technology, which have enhanced the efficiency, portability, and reliability of rental units.

Sustainability and cost optimization are also shaping the trajectory of the rental UPS market. With growing emphasis on reducing carbon footprints and optimizing operational costs, organizations are turning to rental models that allow them to access the latest UPS technology without the burden of ownership, maintenance, or obsolescence. Rental UPS providers often offer energy-efficient systems equipped with remote monitoring and predictive maintenance features, enhancing uptime while minimizing environmental impact. Furthermore, the rental approach aligns well with the evolving business landscape, where agility and scalability are paramount. As companies increasingly seek to align their power infrastructure with fluctuating business needs, the rental UPS market is poised for sustained growth across various verticals.

The concept of Portable Battery Rental is gaining traction as a complementary service to traditional rental UPS systems. This innovative approach allows businesses and event organizers to access portable power solutions that can be easily transported and deployed in various locations. With the increasing demand for mobility and flexibility, portable battery rentals offer a convenient option for temporary power needs, especially in remote or off-grid areas. These systems are particularly beneficial for outdoor events, construction sites, and emergency situations where quick and reliable power is essential. By providing a scalable and adaptable power source, portable battery rentals enhance the overall resilience of power infrastructure, ensuring uninterrupted operations in diverse environments.

From a regional perspective, Asia Pacific is emerging as the fastest-growing market for rental UPS solutions, driven by rapid industrialization, expanding data center infrastructure, and frequent power fluctuations in developing economies. North America and Europe continue to domin