The New Zealand data center colocation market size is expected to grow at a CAGR of 26.13% from 2024 to 2030.
New Zealand is a developing and one of the emerging colocation data center markets in Asia. The country consists of over 33 existing colocation data center facilities across several locations, such as Auckland, Christchurch, Wellington, Hamilton, and others. Auckland is one of the prominent locations in the New Zealand data center colocation market, which is preferred by several colocation companies because of its digitalization efforts, efficient network infrastructure, and enhanced digital connectivity. The city consists of around 16 existing data center facilities, operated by several colocation companies, such as Datacom, Chorus, Spark Digital, CDC Data Centres, and others.
The occupancy rate in the New Zealand data center colocation market is expected to increase significantly in the forecast period, surpassing over 94% due to the increasing demand for colocation services in the country. The presence of several cloud providers, increasing adoption of AI, big data, and IoT, will increase the need for the development of several new colocation data center facilities across multiple locations in New Zealand in the upcoming years.
The demand for colocation services in New Zealand is generated by sectors such as telecom, cloud, government, enterprise, and others. This demand from several sectors is expected to decline in the forecast period as the businesses operating under such sectors are expected to migrate their workloads to the cloud for data storage and processing. However, the cloud sector will contribute significantly to generating the demand for colocation services by 2030.
The foreign investments, including the investments for the development of new colocation data centers, are regulated by the New Zealand Overseas Investment Office. This office grants consents for overseas investments involving New Zealand assets, like, land acquisitions and asset development investments. The industrial land prices in New Zealand are expected to increase in the forecast period due to the entry of hyperscale companies, such as Microsoft and Amazon Web Services, into the New Zealand data center colocation market. These operators require large land for developing their data centers, which is expected to increase real estate prices due to the increased demand.
As the demand for AI workloads is increasing rapidly in New Zealand, the colocation companies are investing to replace the traditional CPU clusters in their facilities with advanced GPUs, such as NVIDIA H100, L40S, and A100, which facilitate complex calculations and AI workloads efficiently. Furthermore, the country is committed to reducing its carbon emissions by 50% by 2030 and to achieving carbon-neutrality by 2050 to mitigate its environmental impact. The government of the country is making several strides to achieve the country’s sustainability target through several initiatives. For instance, the New Zealand Overseas Investment Office has approved the expansion of Datagrid’s renewable energy-powered data center park in July 2024.
Several colocation operators, such as CDC Data Centres, NEXTDC, DCI Data Centers, Datacom, and others, which operate or have been involved in the development of their colocation data centers across New Zealand, are committed to achieving carbon-neutrality across their data centers by 2030, aligning with the country’s broader sustainability goals
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