Top 5 GCC Data Center Locations Near Key Markets

The Gulf Cooperation Council (GCC) is rapidly becoming a global hub for data centers, with investments projected to surpass AED 25.7 billion by 2029. Proximity to key markets, cost advantages, and cutting-edge infrastructure are driving this growth. Here’s a quick breakdown of the top 5 data center hubs in the region:

• Dubai Internet City (DIC): A leading hub with AED 14.3 billion in projected value by 2028. Offers strong connectivity, tax benefits, and AI-ready infrastructure.
• Riyadh Financial District: Central to Saudi Vision 2030, with AI-focused facilities and competitive power costs of AED 0.29/kWh.
• Dammam Industrial Zone: Supports industries like petrochemicals with 123 MW IT capacity and growing investments.
• Abu Dhabi ADGM Area: Known for sustainability, zero corporate tax, and 40% renewable energy use.
• Muscat Duqm Zone: Positioned for growth with AED 1.73 billion market value by 2027 and robust connectivity.

Quick Comparison

These hubs are transforming the GCC into a global digital bridge, with low latency, competitive costs, and sustainable practices. Businesses can benefit from their strategic locations and advanced infrastructure.

1. Dubai Internet City Hub

Dubai Internet City (DIC) stands as the UAE's premier destination for data centers, projected to contribute AED 14.3 billion in value by 2028. This strategic hub plays a critical role in establishing the UAE as a leader in digital infrastructure.

The backbone of DIC's success lies in its state-of-the-art infrastructure, designed to meet the demands of a rapidly evolving tech landscape:

DIC is home to global tech leaders like Microsoft, Google, IBM, and Oracle, which has spurred demand for colocation and cloud services. Its exceptional connectivity to markets in the Middle East, Africa, and Asia has further driven the UAE’s data center growth. Current projects in the sector are valued at AED 4.4 billion, with an additional AED 1.59 billion in the pipeline.

Beyond its infrastructure, DIC offers a business-friendly environment that attracts companies from around the globe:

• Tax Benefits: Qualified activities enjoy complete exemption from personal and corporate taxes.
• Ownership Flexibility: Foreign companies can own 100% of their business without requiring a local partner.
• Capital Freedom: Businesses can repatriate profits and capital without restrictions.

Dubai’s forward-thinking vision for the data center economy focuses on AI-driven infrastructure, drawing in industries that require high-performance computing and ultra-low latency. Initiatives like the Dubai Paperless Strategy, which aims to save AED 900 million by eliminating a billion paper documents, further highlight the city’s commitment to innovation.

As the leading hub in the GCC, DIC not only sets the standard for the region but also drives progress across multiple sectors, solidifying its position as a cornerstone of Dubai’s digital transformation.

2. Riyadh Financial District

Riyadh's Financial District is quickly becoming a central hub for data centers, reflecting the Gulf Cooperation Council's (GCC) ongoing digital transformation. This development aligns seamlessly with Saudi Vision 2030, which prioritises advancements in technology and infrastructure.

Thanks to its strategic location at the crossroads of Europe, Asia, and Africa, the district has attracted significant investments in data center projects. Here's a snapshot of the current landscape and future projections:

These investments are propelling Riyadh to the forefront of the data center industry. A prime example is DataVolt's cutting-edge, AI-focused facility in First Technology Park. Spanning 55,000 square metres and backed by an AED 2.46 billion investment, it showcases the district's commitment to advanced infrastructure.

"With the leadership's commitment to innovation and substantial investments in technology, a favourable regulatory climate and significant cost advantage, Saudi Arabia is poised to become a leading player on the global data center stage and the key player in the evolving regional digital landscape."

• Jawad Shaikh, Partner, Riyadh Office, Middle East

The district's data center ecosystem stands out for two key reasons:

• Strategic Connectivity: Riyadh benefits from direct access to international markets and submarine cable networks, boosting its regional and global reach.
• Operational Framework: The regulatory environment is designed to support efficient data center operations and emerging technologies.

Recent advancements include Saudi Arabia hosting its first Zoom node, a collaboration between Zoom and center3, powered by Oracle Cloud infrastructure. Initiatives like this further integrate Riyadh into the region's growing tech landscape.

Beyond data centers, Riyadh's infrastructure supports Saudi Arabia's broader technology goals. Backed by over AED 1.1 trillion in public investments across sectors like automotive, manufacturing, AI, and space exploration, the city is cementing its role as a critical node in the region's digital connectivity network.

3. Dammam Industrial Zone

Dammam Industrial Zone stands out as a major hub for data centers in Saudi Arabia, boasting an impressive IT load capacity of approximately 123 MW. Its prime location plays a pivotal role in supporting the manufacturing sector, catering to industries such as petrochemicals, steel fabrication, and construction materials.

The zone's growth trajectory is evident in its market performance and future outlook:

These figures highlight the zone's potential for attracting new investments. For instance, in March 2025, Alfanar Global Development announced a significant commitment of AED 5.14 billion to establish data center facilities in both Riyadh and Dammam.

"Alfanar Global Development is leaping into the future with this project, and we are proud of our continuous contribution to Vision 2030 in a transformative way. By creating a secure and scalable digital infrastructure, we are not only advancing the Kingdom's digital economy but also attracting global businesses, putting Saudi Arabia on the map as a leader in data storage and technology-driven innovation."

Dammam provides several advantages that make it a strategic location for data center operations:

• Carrier-Neutral Infrastructure: With multiple providers offering redundant, high-speed fibre-optic connectivity, businesses enjoy reliable and uninterrupted services.
• Regional Integration: Low-latency connections to Riyadh, Jeddah, and Bahrain strengthen its position as a key commercial hub.
• Industrial Synergy: The advanced data center infrastructure supports digital transformation within the manufacturing sector, facilitating automation and IoT advancements.

This combination of factors underscores Dammam's importance in the GCC's digital ecosystem. A prime example is the EDGNEX Dammam DMM-1 facility, developed by DAMAC Group's subsidiary EDGNEX, which showcases the zone's capabilities.

Connectivity is another strong point for Dammam. As Rajit Nanda, CEO of Data Vault, puts it:

"This is a country from where within 25 milliseconds of connectivity, you can connect to one-third of the world."

Local companies like AGE STEEL are also reaping the benefits, driving innovation and strengthening regional connectivity.

4. Abu Dhabi ADGM Area

Abu Dhabi Global Market (ADGM) has cemented its reputation as a key hub for data centers, fueled by its strong financial infrastructure. The data center market in this region is poised for impressive growth, with forecasts suggesting it could reach AED 34.86 billion by 2030.

ADGM has built its success on a foundation of cutting-edge digital infrastructure and exceptional connectivity. These factors ensure not only reliable operations but also cost efficiency. Here's a snapshot of its 2023 performance:

ADGM's connectivity is a standout feature. With direct access to 17 international subsea cables, it offers reliable, low-latency connections - a critical factor for financial services and enterprise operations. This advanced infrastructure ensures seamless global communication and positions ADGM as a leader in the digital economy.

Cost efficiency is another major draw for investors. Power costs in the region are highly competitive, ranging between AED 0.18–0.22 per kWh. Combine this with zero corporate tax, and it's clear why ADGM is an attractive destination for businesses.

Recent announcements highlight ADGM's growing appeal. General Atlantic plans to establish operations by the end of 2024, while Apeiron Investment Group is expanding its presence in the area. These developments reflect increasing confidence in ADGM's business environment.

Key Strategic Advantages

ADGM's competitive edge is reinforced by several strategic factors:

• Regulatory Framework: The use of English common law provides a familiar legal environment for international businesses.
• Proximity to Financial Powerhouses: Close ties to major institutions like Mubadala and ADIA foster collaboration and growth opportunities.
• Advanced Digital Infrastructure: State-of-the-art platforms support smooth and efficient operations.

The presence of leading hyperscale cloud providers further solidifies ADGM's position as a critical player in the data center industry. The colocation market in GCC data centers is projected to grow significantly, with IT load capacity expected to rise from 383 MW to 839 MW by 2025. ADGM's strategic location, offering access to Europe, Asia, and Africa, makes it a pivotal link in the global data center network.

ADGM's combination of strategic location, robust infrastructure, and cost advantages aligns seamlessly with the GCC's broader push for efficient and forward-thinking data center solutions.

5. Muscat Duqm Zone

The Muscat Duqm Zone, located approximately 450 km south of Muscat, has emerged as a critical data center hub, aligning with Oman’s efforts to diversify its economy beyond traditional sectors. This development is further bolstered by Ooredoo’s enhanced presence, which has significantly improved the zone's telecommunications infrastructure. These advancements complement Oman’s robust digital network, which includes 14 operational and 4 planned subsea cables.

Muscat Duqm Zone benefits from its strategic location and supportive economic policies. Positioned outside the Strait of Hormuz, Duqm Port provides unique maritime accessibility. Additionally, the Special Economic Zone offers attractive incentives, including multi-year tax exemptions, duty-free trade, and full foreign ownership rights.

In November 2024, Equinix, in partnership with Omantel, launched the SN1 data center in Salalah, further enhancing the region’s connectivity and digital capabilities.

"This is a very strategic location and we have utilized it to benefit the economy", said Saleh Al Hashmi, general manager of the Public Authority for Special Economic Zones and Free Zones.

The data center market in Oman is showing strong growth potential, with projections estimating it will reach AED 1.73 billion by 2027, driven by an impressive 11.42% CAGR. This growth is underpinned by a 95% internet penetration rate and Oman’s commitment to sourcing 30% of its energy from renewable resources by 2040.

Strategic Advantages

• AWS MENA Region Local Zone: Enhances cloud hosting capabilities in Muscat.
• Omantel-4Trust Joint Venture: Strengthens regional data center operations.
• Smart Port Technology: Advances digital infrastructure at Duqm Port.

These factors position Muscat Duqm as an integral player in the rapidly evolving GCC data center ecosystem.

Location Performance Matrix

The table below outlines key metrics of GCC data centers, offering a snapshot for strategic evaluation.

Saudi Arabia is poised to dominate future GCC data center capacity, accounting for roughly 75% of upcoming projects. Meanwhile, the Dubai Internet City Hub continues to shine as a top connectivity hub. Abu Dhabi's ADGM Area sets a sustainability benchmark with a PUE of 1.3 and 40% renewable energy use, underscoring the UAE's environmental initiatives.

Several key indicators further highlight operational and environmental performance across the region:

• Uptime Reliability
  Dubai and Abu Dhabi facilities deliver an impressive 99.999% uptime SLA, while other locations maintain a solid 99.99% uptime SLA.
• Expansion Potential
  The combined projected capacity increase across these locations is a staggering 1.06 GW.
• Environmental Impact
  The region is working towards a 30–50% reduction in carbon emissions by 2030, with waste heat recovery initiatives already adopted by 15–40% of facilities.

The data underscores the importance of location in driving performance. Proximity to key business districts not only reduces network latency but also provides access to a broader range of carriers, making it a critical factor in the GCC's fast-evolving data center landscape.

Summary

Data centres in the GCC region provide strategic benefits tailored to various business needs. When evaluating potential locations, consider the following factors:

• Market proximity: Opt for locations that ensure low latency for key target markets.
• Power infrastructure: Examine current power capacity and the potential for future growth.
• Connectivity options: Look for diverse carrier options and access to cloud on-ramp solutions.
• Compliance requirements: Verify that local regulations align with your business operations.
• Sustainability goals: Evaluate energy efficiency measures and commitments to renewable energy sources.

These factors highlight the advantages of top-performing hubs in the region. For instance, Dubai Internet City stands out for its excellent connectivity, Riyadh’s district aligns well with stringent financial regulations, and ADGM is recognised for its focus on sustainability and compliance.

The Gulf region’s digital infrastructure continues to grow rapidly, with both hyperscale and edge data centres playing crucial roles in driving digital transformation efforts. This dynamic environment fosters innovation and boosts both connectivity and operational performance.

FAQs

What factors are driving the rapid growth of data centers in the GCC region?

The GCC region is witnessing a surge in data center growth, fueled by several influential factors. One major driver is the widespread digital transformation across industries, which has significantly increased the need for reliable data infrastructure. On top of that, the demand for cloud services is on the rise, and the region's strategic position as a global connectivity hub makes it an attractive location for data operations.

Governments in the GCC are also playing a pivotal role by investing heavily in smart city projects and digital economy initiatives. These efforts are further boosting the demand for advanced data storage and processing capabilities.

Other contributing factors include the rapid growth of e-commerce, the implementation of AI-powered solutions, and the rollout of 5G networks, all of which require robust data management systems. The region's business-friendly policies, such as tax benefits and significant infrastructure investments, have also drawn major global companies to either set up or expand their operations in the GCC.

How do sustainability practices of GCC data centres measure up to global standards?

Sustainability Practices in GCC Data Centres

Data centres in the GCC region are steadily advancing their sustainability efforts, with a growing emphasis on energy efficiency, renewable energy adoption, and eco-conscious infrastructure. Yet, when measured against global benchmarks, there’s still progress to be made in areas like achieving carbon-neutral operations, conserving water, and utilising cutting-edge green technologies.

Some GCC data centres are already making strides towards aligning with international standards. For instance, newer facilities are adopting state-of-the-art cooling systems designed to handle the region’s challenging climate efficiently. However, for the industry to truly compete with global leaders in environmental responsibility, a more widespread commitment to sustainable practices is crucial.

What are the key benefits of GCC data centers for international businesses expanding into the region?

GCC Data Centres: A Gateway for Global Businesses

GCC data centres offer a prime opportunity for international businesses aiming to establish a foothold in the region. Located near key business hubs like Dubai, Abu Dhabi, and Riyadh, these centres provide fast connectivity, minimise latency, and ensure smooth access to local markets.

As the Gulf region drives forward with its digital transformation initiatives, these facilities are built to meet the rising demand for services like cloud computing, colocation, and enterprise IT solutions. What’s more, many GCC data centres are integrating eco-friendly practices and cutting-edge technologies, staying aligned with global trends while addressing the unique needs of the region.

For businesses, tapping into these state-of-the-art data centres means boosting operational efficiency, adhering to local data regulations, and taking advantage of the Middle East’s booming digital economy.

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