Global Data Center Colocation: Growth & New Expansions

Lede

Two recent developments — CoreSite’s new DE3 data center build in Denver, U.S., and Transnet’s launch of a colocation facility in South Africa — reflect how the Data Center Colocation Market is advancing toward its next growth phase. Together, these moves illustrate a global landscape balancing infrastructure expansion, localization, and sustainability. The developments highlight both opportunity and pressure: a race for power-efficient capacity in mature regions and foundational investment in emerging digital economies.

1. CoreSite’s DE3 Data Center: Strengthening the U.S. Colocation Backbone

American Tower’s subsidiary CoreSite has begun constructing its new DE3 data center in Denver, expanding the company’s already substantial interconnection ecosystem. The facility aims to serve growing enterprise and cloud provider demand for low-latency, high-density infrastructure.

Denver has rapidly become a secondary hub complementing primary U.S. colocation markets such as Northern Virginia, Dallas, and Silicon Valley. CoreSite’s DE3 will provide additional interconnection points to enterprises requiring hybrid cloud flexibility, improved redundancy, and proximity to end users in the central United States.

Analysts note that the DE3 expansion is not merely about capacity — it represents a shift toward regional diversification. As major colocation centers approach saturation, operators like CoreSite are targeting metro areas with reliable power supply, strong fiber connectivity, and favorable climate conditions for efficient cooling.

The move also underscores the growing role of neutral-edge facilities, enabling organizations to host workloads close to data-intensive applications, AI processing, and IoT operations without relying solely on hyperscale cloud providers.

CoreSite currently operates two major data centers in downtown Denver — DE1, housed in the historic Denver Gas and Electric Building at 910 15th Street, and DE2, located at 639 E. 18th Avenue. These facilities are among the most connected in the Rocky Mountain region. With the upcoming completion of the DE3 data center, CoreSite’s Denver campus is set to expand significantly, encompassing nearly 600,000 square feet of space and delivering 60 megawatts of critical power capacity, reinforcing the city’s position as a growing hub for digital infrastructure.

2. Transnet’s New Colocation Facility: Building Africa’s Digital Infrastructure

In a pivotal step for Africa’s digital future, Transnet, South Africa’s state-owned freight and logistics company, has opened a data center colocation facility designed to host enterprise and government IT workloads. The initiative aims to improve national digital resilience, reduce latency, and retain data sovereignty.

This facility marks a strategic milestone: it lays the groundwork for Africa’s evolving colocation ecosystem, where domestic enterprises and multinational providers are seeking secure, reliable, and locally hosted data infrastructure.

Transnet’s entry into the colocation space demonstrates how nontraditional players — including logistics and infrastructure firms — are recognizing the strategic and economic importance of data hosting. As Africa’s digital economy grows, local colocation capacity will become essential for supporting fintech, e-commerce, and smart logistics systems, all of which rely on low-latency compute.

Moreover, this expansion aligns with broader national goals for industrial digitalization, public-private partnerships, and infrastructure modernization — connecting Africa more directly to global data routes and reducing dependence on distant hyperscale hubs.

3. A Shifting Landscape: Efficiency, Localization, and Edge Integration

Both the CoreSite DE3 and Transnet projects highlight three overarching shifts shaping the Data Center Colocation Market:

• Decentralization and Edge Enablement – Operators are investing in geographically diverse locations to enhance edge computing performance, minimize latency, and improve resilience.

• Sustainability and Power Efficiency – Rising energy costs and environmental regulations are driving the adoption of greener cooling systems, renewable energy sourcing, and efficient facility design.

• Hybrid Cloud and Interconnectivity Demand – Enterprises increasingly seek hybrid environments that blend on-premise, colocation, and cloud, necessitating dense interconnect ecosystems and carrier-neutral facilities.

As workloads driven by AI, IoT, and 5G accelerate, colocation providers are positioning themselves as key enablers of next-generation computing, where proximity to data is as valuable as processing power itself.

Key Players Driving Growth in the Global Data Center Colocation Market

Leading companies shaping the data center colocation landscape include Equinix, Inc., Digital Realty Trust, Inc., NTT Global Data Centers, CyrusOne, Inc., Global Switch, GDS Services Ltd., 21Vianet Group, Inc., China Telecom (Global Data Centers), CoreSite, QTS Realty Trust, LLC, Telehouse, Centersquare, Flexential, Vantage Data Centers, DataBank Holdings, Ltd., Cologix, Iron Mountain, Inc., ST Telemedia Data Centre Pte Ltd (STT GDC), EdgeConneX Inc., Switch, and others. These players are actively pursuing strategic collaborations, partnerships, and expansion initiatives to strengthen their market presence and address the increasing global demand for reliable, scalable colocation services.

4. Next Move Strategy Consulting – Opinion, Impact, and Near-Term Prospects

Next Move Strategy Consulting interprets these announcements as clear indicators of a maturing Data Center Colocation Market, shifting from capacity-driven expansion toward strategic, sustainable, and value-added growth.

Key Market Perspectives

• Scalability as the next frontier: Providers must build modular and scalable facilities capable of meeting fluctuating data demands from AI and hybrid workloads. Facilities like CoreSite’s DE3 demonstrate this scalability mindset.

• Regional inclusivity: Transnet’s entry showcases how developing regions are now crucial to the global colocation map. Expansion into such markets will diversify the global data infrastructure footprint.

• Sustainability as a business imperative: Efficiency, carbon neutrality, and renewable integration are no longer optional. Colocation providers investing in green infrastructure will gain competitive advantage.

• Value shifting from hardware to ecosystem: The future of colocation lies in managed interconnection services, cloud integration, and compliance management — not just rack space.

5. Practical Suggestions for Stakeholders

• Colocation Operators: Expand into emerging markets with modular facilities; adopt renewable-powered cooling and smart monitoring systems.

• Enterprises: Evaluate hybrid deployment models combining colocation with edge nodes for latency-sensitive workloads.

• Investors: Focus on providers integrating sustainability, automation, and regional growth strategies.

• Governments: Incentivize local data center builds through renewable energy credits and simplified regulatory frameworks.

Conclusion

The construction of CoreSite’s DE3 in the U.S. and Transnet’s facility in Africa signals a new phase for the Data Center Colocation Market — one that blends global scale with local relevance. The sector’s future growth will hinge not just on adding square footage but on achieving sustainable, scalable, and connected infrastructure ecosystems. Companies that align innovation with environmental responsibility and regional adaptability will lead as the digital backbone of the world continues to expand.

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