October 2023 EMEA Data Centre Update

Colo Hyperscale Cloud Telco

EAST RIYADH

NORTH RIYADH

EMEA DEVELOPING MARKET OVERVIEW

KEY INDICATORS*

29MW IN OPERATION

7 OPERATORS, 12 DATA CENTRES

32MW UC / 33MW PLANNED

63% VACANCY RATE

* Definition: Key indicators are based on operational Hyperscale Cloud, Colo, Edge & Telco data centre facilities in the market and excludes Captive & ICT.

CENTRAL RIYADH

MARKET OVERVIEW

Riyadh is the primary location for investment in the Saudi Arabia data centre market, followed by Jeddah and Dammam. The government's dedication to expanding its economy beyond oil has resulted in substantial investments in digital infrastructure. The Vision 2030 initiative, which is the nation's ambitious strategy for economic transformation, underscores the significance of technology and data-driven innovation. This emphasis has spurred substantial investments in data centres. The widespread use of the internet and social media throughout the country, accelerated by the impact of COVID-19, the rollout of 5G services, enhanced domestic connectivity, and other factors, combine to create an appealing opportunity for investors in the Saudi Arabia data centre market. As of H1 2023, 32MW of capacity is actively under construction and 33MW is in planning stages. Although the vacancy is very high at 63%, the rising interest of data centre operators with an early stage pipeline of 200MW is indicating towards a rapid uptake of data centre capacity in the next 2 3 years, primarily due to significant deployment of 5G services and smart city projects (like Neom City). KSA is becoming highly connected via submarine cables. 2Africa, the longest subsea cable, is being deployed to connect KSA with India, the UAE, Spain, UK, Oman, and others. National telecommunications operators are also reinforcing fiber communication via Riyadh. The data centre market is primarily dominated by telco companies based in Saudi Arabia, including Saudi Telecom Company (STC), Mobily, NourNet, GO Telecom (Etihad Atheeb Telecom Company), Gulf Data Hub, and others. Nonetheless, global cloud giants such as Google, Microsoft, Oracle, and Alibaba Cloud have also entered into the Saudi Arabia data centre landscape, positioning themselves to take advantage of its growth. In February 2023, Microsoft unveiled plans for a fresh data centre region within the country, offering Saudi Arabian organizations the benefits of local data residency and quicker access to cloud services. In response to the increasing focus on sustainability and ecological accountability, data centre operators in Saudi Arabia are integrating green technologies and renewable energy resources into their infrastructure to power their operations. This environmentally-friendly strategy not only lowers operational expenses, but also resonates with environmentally aware clients. Initiatives like the National Renewable Energy Program (NREP) under Vision 2030 and the King Salman Renewable Energy Initiative have been launched to optimize the use of renewable energy sources, with the goal of generating more than half of the energy from renewable sources by 2030.

SOUTH RIYADH

ECOSYSTEM DEVELOPMENTS • Microsoft announced in February that it will build a new data centre in Saudi Arabia. The exact location and specifications of the project are unknown; however, it is anticipated that Riyadh would be the most likely choice to win public sector contracts. The data centre will be Microsoft's first in Saudi Arabia. • Huawei has also launched a cloud region in Riyadh that will offer 68 services falling within three categories: data, AI, and cloud native. Huawei hopes the investment will help the country's technological growth. • Agility Logistics Parks , announced its plans in March to develop data centre campuses across several countries including Saudi Arabia, Kuwait, Egypt, and Ghana. The sites will be located next to the company's existing parks that are equipped with power, fiber connectivity and building permits. Agility’s Riyadh site has over 25MW with renewable power availability and 82,000 sqm. • DAMAC Data Centres , in Feb 23, has announced 35MW of IT capacity to be built, in addition to 20MW of capacity already under construction. 5MW of this capacity is likely to go live in Q4 2023, and further 5MW in Q1 2024. • Oracle has announced it will utilize center3, a data centre and service provider, to support its cloud region in Riyadh. In July 2023, center3 completed the expansion of its Riyadh data centre, providing an incremental 9.6MW of capacity to meet global hyperscaler requirements.