According to a Knight Frank report, the region will experience a growth of 47% across the sector with capital expenditure requirement of £4.5 billion
The United Arab Emirates has recorded a 15.3% increase in live IT capacity in 2023, reaching 235.3MW, making it the largest data centre hub in the MENA region, according to Knight Frank’s ‘Data Centres – The MENA Report’. This increase is part of a broader expansion, with a 64MW rise in aggregate supply, or a 12.1% growth. Currently, the UAE boasts a total IT capacity of 592MW, including 180.3MW, that is actively under construction, underscoring the nation's strategic expansion of the technology sector.
Commenting on the rise and demand of data centres in the MENA region, Stephen Beard, Co-Head of Global Data Centres says, “In the dynamic MENA market, data centres are in high demand, and growth is not a matter of ‘if’ but ‘when’. The infrastructure is ready, and expansion opportunities abound through brownfield development or M&A. There is a burgeoning enterprise market. With most existing and newly created OpCo's pivoting towards hyperscale BTS, there is ample room for traditional colocation customers to develop and provide true colocation space.”
He adds, “Across the Middle East, over a quarter of the population is between 15 and 29 years of age. This section of the population is important to future data centre growth as it comfortably embraces technology for a broad spectrum of educational, professional, and social needs. Therefore, the demands placed on data centre services will only increase, making it a prime opportunity for Knight Frank to contribute to this exciting growth.”
Demand For Data Centres On The Rise
The MENA region is currently experiencing a significant surge in demand for data centres, driven by several factors such as the rise in digitisation, resilient connectivity needs, and the widespread adoption of cutting-edge technologies. The United Arab Emirates emerges as a pivotal player in this landscape, hosting the largest concentration of data centres in the Middle East. The report finds that blockchain increasingly features transactions in the UAE, thus showcasing the country's commitment to technological advancements. Artificial intelligence (AI) is equally anticipated to bring substantial benefits and growth to the Middle East's Gulf Cooperation Council (GCC) as the technology matures and usage increases. These 'next wave' technological advances will accelerate the need for a robust digital foundation.
Sustainability also takes centre stage in the region’s positioning, evident in projects such as the Dubai Electricity and Water Association (DEWA) innovation hub—a 1.2GW solar farm underway to support sustainability initiatives. Across the UAE, major players like Gulf Data Hub, Khazna Data Centres, Morohub, Equinix, and Microsoft actively contribute to this growth through expansion projects and partnerships. As the UAE continues to ease regulations and support investments in digitalisation projects like the 'Smart City Strategy,' the region is poised to witness an unprecedented demand for digital infrastructure and data centres.
Saudi Arabia is experiencing rising data centre development growth, primarily propelled by the government's 'Vision 2030' initiative to diversify the national economy. The IT capacity in Saudi Arabia has surged by 29.7% to 109MW since the beginning of the year, making it the fastest-growing data centre market in the Middle East. Egypt has also experienced a substantial increase in aggregate supply, reaching 154.7MW in Q3 2023, reflecting a 133MW increase over 12 months.
Markets like Bahrain, Jordan, Kuwait, Lebanon, Oman, and Qatar are experiencing data centre growth, anticipating a need for 500MW and an investment of approximately c.$5 billion over the next 7-9 years. Echoing on the region's growth, Beard concludes, “Collectively, these nations exemplify the region's unwavering dedication to technological advancement. With expanding IT capacity and a promising economic outlook, the horizon for data centres in the MENA region shines brilliantly.”
