Turkey’s data center colocation market is expected to experience significant expansion between 2025 and 2031, supported by increasing demand for artificial intelligence workloads, cloud adoption, enterprise digitalisation and high-performance computing infrastructure. According to a market analysis by ResearchAndMarkets.com, the sector is projected to grow at a compound annual growth rate (CAGR) of 23.54% during the forecast period as domestic and international operators continue investing in new facilities, advanced infrastructure and higher capacity deployments. The growth is positioning Turkey as an emerging regional hub for data center services, supported by rising demand from enterprises, cloud providers, telecom operators and digital service companies.
The market is expected to reach 1.47 million square feet of utilised area by 2031, with utilised rack capacity forecast to grow to 42,420 units. Data center expansion is being supported by investment opportunities linked to Turkey’s free trade zones under the Free Zones Law No. 3218, including a newly established zone in 2025. These zones provide corporate and income tax incentives that can encourage infrastructure providers and enterprises to increase their presence in the country. Operators are also increasing rack deployments to support growing requirements for AI and high-performance computing applications, which require advanced power management, cooling systems and higher rack density capabilities. Several major developments are contributing to Turkey’s data center ecosystem growth. Turk Telekom has entered a strategic collaboration with Cisco to integrate advanced cloud based and Internet of Things platforms into its data center operations, supporting next generation 5G services, cloud infrastructure and digital solutions. TDC Data Services, a subsidiary of Turkcell, secured $117 million in five year Murabaha financing from Emirates NBD Bank to accelerate data center expansion and digital infrastructure investment. Khazna Data Centers has also announced plans for an AI ready facility in Baskent OIZ near Ankara, which is expected to add around 500 thousand square feet of whitespace capacity when fully developed. In addition, DAMAC Digital and Vodafone inaugurated the first phase of the Izmir data center in September 2026, with an initial capacity of 4MW and planned expansion to 20MW.
Artificial intelligence and machine learning workloads are becoming major drivers of data center investment in Turkey as organisations increasingly integrate AI into business operations. The country’s National Artificial Intelligence Strategy 2021 to 2025 has supported innovation, digital transformation, workforce development and the creation of a human centred AI ecosystem. Alongside AI growth, smart city initiatives are increasing demand for secure and scalable digital infrastructure. Turkey’s National Smart Cities Strategy and Action Plan 2024 to 2030 includes research infrastructure and testing environments for technologies such as autonomous vehicles, creating additional requirements for cloud platforms, edge computing, connectivity and data processing capacity. However, supply chain challenges remain a key consideration for data center development. Operators continue to rely on imported high-performance servers, networking equipment, storage systems, semiconductors and other critical infrastructure components. Delays in procurement and equipment availability can affect project timelines, increase costs and create challenges in operational planning. Despite these challenges, the cloud and IT sector accounted for approximately 45% of Turkey’s colocation demand in 2025, making it the largest industry segment, followed by telecom. Enterprise cloud migration, hyperscale adoption, AI applications and broader digitalisation efforts continue to support market expansion.
Retail colocation accounted for more than 65% of total market revenue in 2025, while wholesale colocation is expected to gain momentum through 2031 due to increasing demand for hyperscale deployments, build to suit projects and AI ready infrastructure. The market analysis covers 33 existing facilities, four upcoming facilities and more than four cities, examining factors including utilised white floor area, IT power capacity, racks, occupancy, pricing, sustainability, cloud connectivity and submarine cable developments. Existing operators in the market include Equinix, Turkcell, Turk Telekom, Sadece Hosting, Radore, NGN, KKB Kredi Kayit Burosu, Vodafone, Telehouse, Comnet Turkiye and Sparkle, while new entrants include DAMAC Digital, EdgeConneX and Khazna Data Centers.
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