Think you know where the best data center investments are?
This analysis of global developed and emerging markets reveals opportunities most investors might be missing, including overlooked potential in secondary cities across mature markets.
Here's what you need to know.
As primary data center hubs become increasingly saturated, the global landscape is transforming rapidly.
While emerging markets offer significant growth potential, secondary and tertiary cities in developed markets can present compelling opportunities for strategic investors who understand how to leverage existing infrastructure and growing regional demand.
Expanding Your Data Center Investment Horizons: A Global Perspective
Understanding the Evolution of Mature Markets
The U.S., European, and Australian markets offer sophisticated ecosystems beyond their primary hubs.
While Northern Virginia dominates U.S. operations, cities like Phoenix, Salt Lake City, and Austin are emerging as attractive alternatives with strong infrastructure and lower operating costs. Beyond Silicon Valley and Dallas-Fort Worth, markets like Denver, Minneapolis, and Charlotte provide compelling combinations of power availability, connectivity, and growing tech presence.
European opportunities extend well beyond FLAP-D markets (Frankfurt, London, Amsterdam, Paris, Dublin).
Cities like Milan, Madrid, Warsaw, and Copenhagen demonstrate how secondary markets can leverage strong infrastructure and regional demand. Rising power constraints and costs in primary hubs make these alternatives increasingly attractive for investment consideration.
In Australia, while Sydney, Melbourne, and Perth lead the market, cities like Brisbane and Adelaide offer strategic advantages in power costs and land availability while maintaining strong connectivity to major Asian markets. These secondary cities provide opportunities for investors seeking established market stability with growth potential.
Secondary markets in developed regions present a compelling investment case through their combination of established infrastructure and growth potential.
These markets typically offer more favorable power allocation policies and growing enterprise demand, supported by mature regulatory frameworks. The presence of skilled technical workforce and regional government support often enhances the investment proposition.
Tomorrow's Digital Hubs: The Global Growth Story
Asia Pacific continues to demonstrate strong market potential across diverse economies.
Singapore maintains its position as a premium regional hub, offering world-class infrastructure and regulatory clarity.
Malaysia emerges as a key player, leveraging its strategic location and robust digital infrastructure supported by the Malaysia Digital Economy Blueprint. Indonesia and Vietnam show rapid expansion through digital adoption and favorable demographics, while India's massive scale potential and strong IT workforce create unique opportunities.
Eastern European markets, particularly Poland and the Czech Republic, are reshaping the regional data center landscape.
These markets leverage their proximity to major European demand centers while maintaining competitive operating costs. Strong technical workforce availability and alignment with EU standards create an attractive environment for western operators expanding eastward.
The Middle East demonstrates innovation through markets like Dubai, Abu Dhabi, and Saudi Arabia, which lead regional development through strong government support and abundant resources.
These markets emphasize cutting-edge technology adoption and benefit from robust fiber connectivity, while government digital initiatives drive sustained growth in demand.
African growth centers in South Africa, Kenya, and Nigeria drive regional development through improving connectivity infrastructure and rising cloud service adoption.
These markets focus on developing basic regulatory frameworks while addressing power infrastructure challenges. Telecommunications providers play a crucial role in market development.
South American evolution continues through Brazil, Chile, and Mexico, which lead market development through improved infrastructure and domestic digital transformation. These markets balance grid reliability challenges with renewable energy opportunities while addressing currency stability concerns. Regional integration creates opportunities for scale.
Investment strategy now requires consideration of three distinct market categories.
Primary markets will demand focus on operational efficiency and established relationships, though they require significant capital and face increasing constraints.
Secondary markets in developed regions can offer attractive economics and expansion potential while maintaining developed market advantages.
Emerging markets can present high growth potential through strong local partnerships and flexible entry strategies.
Infrastructure Strategy for Market Success
Secondary markets in developed regions can provide compelling infrastructure advantages through robust power grids and strong fiber connectivity.
Understanding Risk and Return Across Markets
Each market category presents distinct characteristics for risk and return consideration.
Creating Global Leadership in Data Center Investment
Market Entry and Competitive Advantage
Success requires deep understanding of regional demand drivers and strong relationships with local stakeholders. Strategic site selection must balance immediate costs against long-term potential, while maintaining scalability for future growth. Regional enterprise requirements and edge computing trends shape market positioning strategies.
Excellence in Global Operations
Operational strategy should maintain consistent standards while adapting to local conditions. Strong regional teams leveraging local market knowledge prove essential, as does the ability to monitor and respond to regional demand patterns. Flexibility in approach allows adaptation to market evolution.
IF YOU ENJOYED THIS ARTICLE AND WANT MORE CONTENT LIKE THIS:
Subscribe to this newsletter to get notified when a new issue comes out (bi-weekly).
