Tier-Two colocation metro markets experienced largest YoY growth, according to Synergy

Includes hotspots like Johor and Kuala Lumpur

Tier-Two colocation metro markets experienced the largest YoY growth, according to a report by Synergy Research Group.

Tier-Two is defined as the top 11 to 70 global colocation markets by revenue, which includes Johor and Kuala Lumpur in Malaysia; Johannesburg, South Africa; Portland, Austin, Quincy, and San Antonio in the US; Jakarta, Indonesia; Mumbai, India; Lagos, Nigeria; Warsaw, Poland; and Dubai.

The growth rate was calculated by comparing colocation revenues in the last four quarters with the previous four. This came out to 12 percent for the top 11 to 40 markets and 17 percent for the top 41 to 70 markets, compared to eight percent for the top 10 markets.

The top 10 include Northern Virginia, Silicon Valley, and New York in the US; Beijing and Shanghai, China; London, the UK; Tokyo, Japan; and Frankfurt, Germany.

However, the top 10 account for 41 percent of the market, compared with 31 percent for the top 11 to 40, and eight percent for the top 41 to 70.

According to Synergy, the leading colocation companies are America’s Equinix, Digital Realty, and CyrusOne, Japan’s NTT and KDDI, and China’s China Telecom, Chindata, and GDS.

Chief analyst John Dinsdale said: “Proximity to customers remains a key driver of the colocation market, so data centers tend to be located in metros that have a large concentration of companies and economic activity. Consequently, the markets in the top 10 have not changed since Synergy published a similar analysis a year ago, though there has been some movement in the ranking, with Shanghai having leapfrogged London.

“What is more interesting is the much higher growth rate of many emerging markets. While the top ten have grown by an average of eight percent, no less than 17 tier two metros have grown by 20 percent or more.”

Dinsdale added that the scale of these smaller markets would not match the current top 10 “anytime soon.”

According to a previous report from Synergy, published in April 2025, the top twenty metros account for 60 percent of the world’s colocation market by revenue.