Dublin, April 30, 2026 (GLOBE NEWSWIRE) — The “UAE Data Center Colocation Market Size & Forecast by Revenue, Capacity, and 70+ Metrics Across Service Type, Facility Architecture, Customer Segment, AI vs Non-AI Workloads, End-Use, and Capacity Pipeline, Databook Q2 2026” has been added to ResearchAndMarkets.com’s offering.
The United Arab Emirates (UAE) data center colocation market is poised for significant expansion, with an anticipated annual growth rate of 27.5%, reaching US$1.77 billion by 2026. The market showed robust growth between 2021-2025, recording a CAGR of 24.1%. Forecasts suggest the market will grow by 21.7% from 2026-2030, expanding from US$1.39 billion in 2025 to approximately US$3.90 billion by the end of 2030. This increase is driven by rising AI and GPU workload demand, hyperscaler capacity build-out, and hybrid multi-cloud infrastructure adoption.
Key Trends and Growth Drivers
Dubai and Abu Dhabi Develop Complementary Colo Positions
- Two parallel colo markets are emerging, with Dubai servicing financial services and enterprises through its free zone ecosystem and carrier-dense connectivity, while Abu Dhabi focuses on government and sovereign digital infrastructure, propelled by investments from Mubadala and ADQ. Both cities attract hyperscale operator investment in 2025.
- The UAE’s strategic position, political stability, and government infrastructure investments make it the preferred Middle Eastern colo market for multinationals.
- Dubai and Abu Dhabi’s complementary roles cater to commercial and financial demand and sovereign and government needs, respectively.
Hyperscale Entry Establishes UAE as Regional Cloud Gateway
- With cloud regions operated by Microsoft, Google, AWS, and Oracle in Abu Dhabi and Dubai, further constructions are underway. This establishes the UAE as the Middle Eastern and African cloud gateway.
- Enterprises and governments seeking low-latency global cloud access are drawn to UAE-hosted deployments over European alternatives.
- The burgeoning hyperscale ecosystem increases adjacent colo demand from regional enterprises.
Cooling Technology Investment Addresses Extreme Climate Operating Costs
- The UAE’s summer temperatures exceeding 45C present unique operational challenges, prompting investments in advanced cooling technologies such as district cooling, evaporative cooling, and liquid cooling.
- Government sustainability commitments and rising energy costs encourage investments in cooling efficiency, crucial for government contract bids.
- Cooling technology becomes a key operational differentiator, with efficient cooling translating to lower operational costs and sustainability advantages.
Competitive Landscape
Current State of the Market
- The UAE leads the Middle Eastern colo market, with Dubai dominating connectivity and commercial operations and Abu Dhabi focusing on government-aligned capacity.
Key Players and New Entrants
- Equinix, Gulf Data Hub, Khazna Data Centers, and G42 are key players, with new capacity developments in Dubai and Abu Dhabi.
Recent Launches, Mergers, and Acquisitions
- In 2025, expansions by Khazna Data Centers and G42 in Abu Dhabi and capacity additions by Equinix in Dubai cater to sustained demand, positioning Abu Dhabi as a sovereign data infrastructure hub.
Infrastructure & Regulatory Environment
- Managed by DEWA and ADNOC/ADWEC, UAE’s electricity is primarily natural gas-based with growing renewables. Favourable costs and reliable grids make it attractive for energy-intensive operations.
- Federal Decree-Law No. 45 of 2021 governs data privacy, with no broad localization requirements, fostering a conducive environment for cross-border data transfers.
Barriers to Expansion
- Costs related to cooling and energy consumption present challenges, with talent shortages for specialized operations requiring international recruitment.
The UAE remains the regional leader in the Middle East’s colo market, with its strategic advantages ensuring its role as the primary digital gateway for enterprise and government clients across the region. Operators focusing on cooling efficiency will benefit from lower costs and heightened sustainability.
Key Attributes
| Report Attribute | Details |
| No. of Pages | 125 |
| Forecast Period | 2026-2030 |
| Estimated Market Value (USD) in 2026 | $1.77 Billion |
| Forecasted Market Value (USD) by 2030 | $3.9 Billion |
| Compound Annual Growth Rate | 21.7% |
| Regions Covered | United Arab Emirates |
For more information about this report visit https://www.researchandmarkets.com/r/6gf5q3
About ResearchAndMarkets.com
ResearchAndMarkets.com is the world’s leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
- Emirati Data Center Colocation Market
