MEA DATA CENTER CONSTRUCTION MARKET

Middle East and Africa Data Center Construction Market is estimated to attain a robust CAGR of 15.1% till 2031 owing to the increasing population and urbanization, rapid growth in digital transformation along with a surge in cloud computing adoption.

Major MEA Data Center Construction Market Drivers and Emerging Trends

The data center construction market in the Middle East and Africa has shown rapid expansion in recent years and is forecasted to continue its upward trajectory fostered by substantial investor interest in expanding operations in the region. Several variables are propelling a significant increase in data demand such as the digital transformation advancement along with rising investment in submarine cables and fiber connectivity which is attracting increased attention from investors looking to expand their data center presence in the region. With the ongoing expansion of the digital economy, data centers are essential for meeting the increasing demand for data storage and processing which presents investors with a stable investment opportunity and a dependable revenue stream. Furthermore, the strategic location of data centers in the Middle East and Africa can provide access to global markets and improve interconnectivity which is appealing to businesses seeking trustworthy data services. The MEA’s data center construction market is still in its early phases but is growing at a fast pace, as the region is anticipated to emerge as one of the most rapidly expanding data center markets in the upcoming years, utilizing its potential to narrow the gap between supply constraints and escalating demand.

The other factor supporting the Middle East and Africa data center construction market growth is the population expansion and urbanization trends that have spurred greater internet access and an increasing requirement for digital transformation throughout the region. As a result, these factors are exerting a significant influence on the data center market and compel rapid expansion to accommodate the increasing demand. The rising popularity of cloud computing and digital services in the region is also fueling a greater need for data center space to support cloud computing solutions.

Additionally, data sovereignty has become increasingly important, considering much of the data in the Middle East and Africa currently located outside the region, thereby there is an increasing need for data centers to accommodate countries’ desires for more control over locally stored data. Several countries in the region have also implemented favorable government policies including infrastructure development, tax incentives, and specialized economic zones which create a conducive environment for an expanding data center sector.

Nevertheless, the Middle East and Africa data center construction market industry also encounters various challenges that can hamper its expansion. The region faces challenges like limited access to renewable energy, harsh climate conditions (particularly water scarcity in the Middle East) and issues such as connectivity limitations and power outages, especially in Africa. Investors and businesses exploring opportunities in the data center market here must carefully assess and manage these challenges.

Another challenge in constructing data centers in the MEA region is the significant cost associated with construction. Like the real estate industry, the construction market is encountering various challenges that contribute to heightened project costs. These encompass supply chain disruptions, longer lead times for key components, a shortage of skilled labor in the data center industry, heightened and fluctuating commodity prices as well as growing inflationary pressures. Despite challenges, the market is poised for significant growth, enabling market participants who effectively navigate obstacles and capitalize on opportunities to thrive in this expanding and dynamic environment.

The UAE and Saudi Arabia are anticipated to lead data center growth with Oman, Bahrain, Kuwait, and Qatar close behind driven by the rapid expansion of 5G networks. The UAE and Saudi Arabia are at the forefront in the region with 28 and 22 data center colocations respectively, showcasing their leadership in data center investments amid robust digital transformation and smart city projects. Meanwhile, Africa’s data center market is perceived as underserved and comparatively behind in terms of capacity and scale despite its considerable geographical expanse and dense population. However, the situation is beginning to evolve with major players showing increasing interest in either entering or expanding their cloud services within the region. While Africa’s digital transformation is not advancing as quickly as in the Middle East, certain countries are making substantial enhancements to their digital infrastructure which is boosting the need for data in the region. South Africa is projected to lead in investments with Nigeria and Kenya following closely, while Egypt is emerging as a regional hub attracting interest from prominent African investors for data center development.

Based on the tier type, the Tier 3 segment currently dominates the market share in the region, largely due to its robust features and advantages. These tiers are characterized by high redundancy levels as well as numerous power and cooling pathways. The Tier 3 segment is anticipated to expand further due to the increasing adoption of edge networking and cloud connectivity.

Based on the applications, banking, financial services and insurance (BFSI) is estimated to lead the market. Data is fundamental for BSI firms driven by strict regulations on data storage and security. The BFSI sector is characterized by digitalization which leads to exponential growth in data volumes due to increased usage of banking applications.

Top Market Players

Several major players within the market include Turner Construction Company, DPR Construction, AECOM, Schneider Electric, M. A. Mortenson Company, Arup, Brasfield & Gorrie, L.L.C., CORGAN, Currie & Brown Holdings Limited, Fortis Construction, among other key players.

Segments covered in the Report:

The Middle East and Africa Data Center Construction Market has been segmented on the basis of tier type, infrastructure and vertical. Based on the tier type, the market is segmented into tier 1, tier 2, tier 3, tier 4. Based on the infrastructure, the market is segmented into cooling infrastructure, power infrastructure, racks and cabinets, servers, networking equipment, physical security infrastructure, design and consulting services, other infrastructure. The cooling infrastructure segment is further segmented into air-based cooling, liquid-based cooling, evaporative cooling. The power infrastructure segment is further segmented into ups systems, generators, power distribution unit (PDU). Based on the vertical, the market is segmented into it & telecom, BFSI, government & defense, healthcare, energy, others.

Report Coverage	Details
Market Revenues (2023)	USD Million
Market Base Year	2023
Market Forecast Period	2024-2031
Base Year & Forecast Units	Revenues (USD Million)
Market Segment	By Tier Type, By Infrastructure, By Vertical
Regional Coverage	Middle East and Africa
Companies Profiled	Turner Construction Company, DPR Construction, AECOM, Schneider Electric, M. A. Mortenson Company, Arup, Brasfield & Gorrie, L.L.C., CORGAN, Currie & Brown Holdings Limited, Fortis Construction, among others; a total of 12 companies covered.
25% Free Customization Available	We will customize this report up to 25% as a free customization to address our client’s specific requirements

Market Segmentation

Middle East and Africa Data Center Construction Market by Tier Type

• • Tier 1
  • Tier 2
  • Tier 3
  • Tier 4

Middle East and Africa Data Center Construction Market by Infrastructure

• • Cooling Infrastructure
    • Air-based Cooling
    • Liquid-based Cooling
    • Evaporative Cooling
  • Power Infrastructure
    • UPS Systems
    • Generators
    • Power Distribution Unit (PDU)
  • Racks and Cabinets
  • Servers
  • Networking Equipment
  • Physical Security Infrastructure
  • Design and Consulting Services
  • Other Infrastructure

Middle East and Africa Data Center Construction Market by Vertical

• • IT & Telecom
  • BFSI
  • Government & Defense
  • Healthcare
  • Energy
  • Others

Middle East and Africa Data Center Construction Market Leading players (Option 1: Free 25% Customization – Profiles of 5 Additional Companies of your Choice)

• • Turner Construction Company
  • DPR Construction
  • AECOM
  • Schneider Electric
  • M. A. Mortenson Company
  • Arup
  • Brasfield & Gorrie, L.L.C.
  • CORGAN
  • Currie & Brown Holdings Limited
  • Fortis Construction