TeleGeography, a global leader in telecommunications market research and consulting services company, has announced that Tokyo remains the world’s largest retail colocation market, registering a gross retail capacity of 13.8 million square feet in 2021. The second and third largest markets – Hong Kong and Washington (NOVA) – each have a data center footprint 50% smaller than Tokyo.
The Data Center Research Service of TeleGeography gives an up-to-date database with key tools and insights for understanding the nature of data centers, interconnection, and network storage on a global scale.
“Long-term colocation growth across markets tends to be modest in both large and smaller markets. Between 2017 and 2021, the median CAGR among a sampling of 109 markets was just 6%,” said Jon Hjembo, Senior Manager at TeleGeography. “Major hubs outpacing the median growth rate include Amsterdam, Frankfurt, and Washington, each with at least 10% compound annual growth in retail capacity.”
Seoul, Madrid, Montreal, Johannesburg, and Mumbai are also remarkable markets, with at least 1 million sq. ft. of retail colocation space, each with a rapid growth of between 18% and 35% CAGR for gross capacity over the past five years.
Of the operators tracked in TeleGeography’s database, at least 200 data center sites are currently in the pipeline. While this manufacturing is spread across global regions, Europe and Asia have outpaced other regions, including North America, with the largest percentage of new deployments.
“We’ve also observed a recent inflection point in the data center and broader interconnection market,” added Hjembo. “While traditional hub markets have seen continual growth, numerous secondary markets and metropolitan nodes on the frontier of network development have seen tremendous new investment by both local and international operators. This has involved a mix of network, data center, cloud, and internet exchange operators, working together to build new and more widely distributed hubs.”
As traditional markets get mature and profits shrink due to increasingly intense competition, operators are looking for first-mover advantages in emerging markets. This motivation has pushed investments into increasingly volatile markets in the last few years.