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In the rapidly evolving digital landscape, Latin America emerges as a pivotal nexus for data center expansion and innovation. From the bustling tech corridors of São Paulo to the strategic hubs in Santiago, Queretaro, and Bogota, the region is witnessing an unprecedented surge in data center infrastructure. This growth is not just a testament to technological advancements, but also a reflection of the region’s strategic importance in the global digital ecosystem. As we delve deeper, let’s explore the nuances and dynamics of the Latin America data center market, and the transformative trends shaping its future.

São Paulo: Brazil’s Data Center Epicenter

Key Indicators:

Absorption: 30MW (H1 2023)
In Operation: 301MW
Under Construction: 132MW
Vacancy Rate: 6%

São Paulo, Brazil’s primary data center hub, has been the focus of regional operators and global hyperscalers. Given its massive population and limited data center availability, São Paulo serves as an ideal gateway into South America. With fiber-rich connections and access to ten major undersea cable routes, the city is well-connected. Major players like Ascenty, Equinix, and ODATA dominate the colocation space. Notably, Microsoft’s projects in Campinas and Hortolândia mark their debut in the Latin American landscape, with other giants like AWS, Google, and Oracle also establishing their cloud region footprint. The shift towards wind power is evident with companies like Microsoft and ODATA investing in wind farms. The coming years are expected to witness significant data center developments in this market.

Santiago: South America’s Western Anchor

Key Indicators:

Absorption: 18MW (H1 2023)
In Operation: 190MW
Under Construction: 35MW
Vacancy Rate: 6%

Santiago, a hub for South America’s southern and western parts, has seen a surge in data center interest. Its strategic location, government incentives, and growing renewable energy sources make it an attractive market. Despite the dominance of local telcos and modest colocation services until 2021, global players like Ascenty, ODATA, and EdgeConneX have entered the market. Google pioneered the Santiago data center landscape in 2015, and the presence of other giants like Microsoft and Oracle further strengthens its position. The diversified renewable energy options in Santiago, including hydroelectric, wind, and solar, account for nearly half of its energy generation. Santiago’s future looks promising, with an anticipated expansion from both hyperscalers and colocation providers.

Queretaro: Mexico’s Premier Data Center Cluster

Key Indicators:

Absorption: 45MW (H1 2023)
In Operation: 115MW
Under Construction: 42MW
Vacancy Rate: 4%

Queretaro stands out as Mexico’s primary data center cluster. Its robust digital infrastructure, government incentives, and minimal risk from natural disasters make it a prime focus for developers. Leading colocation operators include Ascenty, ODATA, KIO Networks, and Equinix. Hyperscalers like Oracle Cloud, Google, and Microsoft have announced expansion plans in the region. Despite a modest 22% renewable energy contribution, there are concerted efforts to enhance sustainable energy options. Queretaro is poised for significant growth, transitioning from isolated data halls to a primary data center market.

Bogota: Colombia’s Rising Data Center Hub

Key Indicators:

Absorption: 9MW (H1 2023)
In Operation: 30MW
Under Construction: 61MW
Vacancy Rate: 15%

In the past year, Bogota has emerged as a focal point for data center operations, especially with AWS announcing a Local Zone for the market. Its strategic location, robust digital infrastructure, and trade incentives make it a hotbed for international data center operators. Major players like Equinix, ODATA, Ascenty, and KIO Networks have established their presence. Oracle’s collaboration with local telco Claro for a cloud region further underscores the market’s potential. With approximately 70% of energy sourced from hydroelectric power, there’s a growing emphasis on expanding renewable energy sources. Bogota presents a bright future for new market entrants in the upcoming years.

Stay tuned to our blog for more insights into the data center industry and how Layer 9 Data Centers is contributing to Mexico’s role and shaping its future.

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