Japan Data Center Colocation Market Expected to Reach USD 14.4 Billion by 2033 - IMARC Group

February 11, 2025 | Technology & Media

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Japan Data Center Colocation Market Statistics, Outlook, and Regional Analysis 2025-2033

The Japan data center colocation market size was valued at USD 4.4 Billion in 2024, and it is expected to reach USD 14.4 Billion by 2033, exhibiting a growth rate (CAGR) of 14.2% from 2025 to 2033.

Japan Data Center Colocation Market

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The surging demand for scalable AI-ready infrastructure is driving the market expansion in Japan. Businesses are seeking cloud and carrier-neutral solutions to support their digital transformation and high-performance needs. New developments are focusing on expanding critical IT capacity, with facilities offering enhanced power and efficiency. For instance, in March 2024, Digital Reality, a cloud data center and colocation company, launched NR12, its second facility at the NRT campus in Inzai City, Chiba Prefecture.

Similarly, in January 2025, EdgeConneX collaborated with Kagoya Asset Management to develop a new data center in the Osaka-Kyoto area. The facility, slated for completion in 2027, will offer over 140 megawatts of capacity, becoming one of the largest in the Kansai region. This state-of-the-art center will also cater to the growing demand for digital and AI infrastructure, with a design tailored for high-density AI and high-performance computing applications, further expanding the market growth in Japan. Besides this, with 5G offering faster data speeds and lower latency, businesses require more localized infrastructure for real-time processing and efficient data management. IoT devices enable large volumes of data that need storage near the source. Colocation centers provide the necessary low-latency, high-capacity solutions to meet these demands.

Japan Data Center Colocation Market Statistics, By Region

The market research report has also provided a comprehensive analysis of all the major regional markets, which include Kanto region, Kansai/Kinki region, Central/ Chubu region, Kyushu-Okinawa region, Tohoku region, Chugoku region, Hokkaido region, and Shikoku region. The rise of 5G technology, the growing need for data storage in the e-commerce industry, and continuous improvements in IT infrastructure are proliferating the market growth in Japan.

Kanto Region Data Center Colocation Market Trends:

The growing number of financial institutions across the Kanto region is driving the market growth. The demand for AI-ready and high-density facilities has led to developments like Digital Realty’s NRT campus in Chiba. Moreover, various major corporations are expanding their data centers in Tokyo, which is further driving the market in the region.

Kansai/Kinki Region Data Center Colocation Market Trends:

The Kansai/Kinki region is emerging as a data center hub, leveraging lower natural disaster risks. Companies seeking renewable energy sources are increasingly opting for Osaka. Also, EdgeConneX is developing a facility in Osaka with 140 MW capacity, targeting high-performance computing and AI workloads, further accelerating the market growth.

Central/Chubu Region Data Center Colocation Market Trends:

The growing automotive industry in various cities like Nagoya is driving the colocation demand in the Central/Chubu region. Corporations like NTT Communications have expanded their data center capacity to support industrial IoT. Besides this, Nagoya’s robust industrial base, supported by companies like Toyota, generates significant demand for colocation services.

Kyushu-Okinawa Region Data Center Colocation Market Trends:

The rising demand for sustainable colocation is driving the market growth in the Kyushu-Okinawa region. Data centers in this area utilize renewable energy. Also, Fukuoka, as a growing tech hub, supports this expansion, with companies prioritizing green IT solutions. Moreover, various companies like Kyocera have invested in data centers in this region to support global connectivity and local businesses.

Tohoku Region Data Center Colocation Market Trends:

The Tohoku region is developing renewable energy for data centers. Areas like Fukushima, aiming for 100% renewable energy by 2040, have attracted green data center projects. Additionally, various companies are utilizing surplus wind and solar energy of Tohoku for energy-intensive colocation services.

Chugoku Region Data Center Colocation Market Trends:

Cities like Hiroshima in the Chugoku region emphasize energy efficiency in colocation services. The region’s rich hydroelectric power has attracted environmentally conscious companies to set up data centers here. Also, data centers in Hiroshima are increasingly marketed as green solutions, catering to companies’ sustainability.

Hokkaido Region Data Center Colocation Market Trends:

Hokkaido offers a distinct advantage with its naturally cold climate, which significantly reduces cooling costs for data centers. This has led to the elevating inclination in the region towards high-efficiency data center operations. Companies like Internet Initiative Japan (IIJ) have established facilities in Hokkaido to capitalize on this cooling efficiency and the region’s stable power supply.

Shikoku Region Data Center Colocation Market Trends:

The Shikoku region, known for its smaller scale compared to other regions, is focusing on niche colocation markets. Its rich renewable energy sources, especially hydroelectric power, are being used to attract small-to-medium-sized businesses requiring green data solutions. Tokushima has seen development in colocation services, targeting enterprises that value energy-conscious operations.

Top Companies Leading in the Japan Data Center Colocation Industry

The market has been encompassed with prominent businesses that offer improved services. Mitsubishi Corporation and Digital Realty Company in September 2024 gained traction for Japan's data center services industry. The company aids in providing strategic investments and advanced technologies that offer Japanese businesses innovative, secure, and sustainable infrastructure.

Japan Data Center Colocation Market Segmentation Coverage

On the basis of the type, the market has been bifurcated into retail colocation and wholesale colocation. Retail colocation allows leasing small space in external data centers to save cost. In contrast, wholesale colocation provides larger, dedicated spaces.
Based on the organization size, the market has been bifurcated into small and medium enterprises and large enterprises. The data center colocation needs of SMEs differ from those of large enterprises, influenced by the scale of their operations. The former requires the services for optimal connectivity.
On the basis of the end use industry, the market has been bifurcated into BFSI, manufacturing, IT and telecom, energy, healthcare, government, retail, education, entertainment and media, and others. The BFSI sector depends significantly on data centers for data storage. Moreover, manufacturers leverage data centers for industrial IoT (IIoT), supply chain management, and automation. Other sectors require higher network bandwidth, thereby expanding the segment’s growth.

Report Features	Details
Market Size in 2024	USD 4.4 Billion
Market Forecast in 2033	USD 14.4 Billion
Market Growth Rate 2025-2033	14.2%
Units	Billion USD
Scope of the Report	Exploration of Historical and Forecast Trends, Industry Catalysts and Challenges, Segment-Wise Historical and Predictive Market Assessment: Type Organization Size End Use Industry Region
Types Covered	Retail Colocation, Wholesale Colocation
Organization Sizes Covered	Small and Medium Enterprises, Large Enterprises
End Use Industries Covered	BFSI, Manufacturing, IT and Telecom, Energy, Healthcare, Government, Retail, Education, Entertainment and Media, Others
Regions Covered	Kanto Region, Kansai/Kinki Region, Central/ Chubu Region, Kyushu-Okinawa Region, Tohoku Region, Chugoku Region, Hokkaido Region, Shikoku Region
Customization Scope	10% Free Customization
Post-Sale Analyst Support	10-12 Weeks
Delivery Format	PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)

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Japan Data Center Colocation Market Expected to Reach USD 14.4 Billion by 2033 - IMARC Group

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