Revealed: world’s costliest, most competitive places to build data centres

The company’s latest Data Centre Construction Cost Index puts average construction costs in Europe at US$12.76 per watt, up 13% year on year. That was the largest regional increase globally and compares with US$9.93/W in the Middle East, US$12.10/W in Asia and US$12.06/W in North America.

At individual market level, Tokyo tops the index at US$18.28/W, followed by Osaka at US$17.15/W. Zurich is third at US$15.93/W, ahead of Singapore at US$15.39/W and Silicon Valley at US$15.01/W.

Shanghai is the lowest-cost market at US$5.79/W, followed by Mumbai at US$6.83/W, Ho Chi Minh City at US$8.32/W, Bogota at US$9.13/W and the UAE at US$9.20/W.

Now in its tenth edition, the index draws on more than 500 live or recently completed projects across 62 markets, alongside a survey of more than 400 industry experts. Its indicative construction costs are based on a typical 60MW design.

Europe’s rising costs reflect growing pressure on contractor capacity as demand for larger and more technically complex facilities increases. Just 19% of European survey respondents believe contractor capacity is manageable, compared with 52% globally.

Five European cities feature among the ten most expensive markets: Zurich, Copenhagen, Oslo, Stockholm and Helsinki. London ranks 15th globally, at US$12.95/W.

Niall O’Reilly, director and data centre lead for Europe at Turner & Townsend, said demand in locations including Scandinavia was exceeding contractor capacity and pushing up construction costs.

“Europe is facing a major skills shortage and risks losing out to international competitors on the technical expertise and leadership experience needed to deliver major data centre projects,” he said.

In the Middle East, Saudi Arabia ranks 40th in the index at US$10.80/W, Qatar 53rd at US$9.80/W and the UAE 58th at US$9.20/W.

Alan Coary, director and data centre lead for the Middle East at Turner & Townsend, said the region stood to benefit from relatively low construction and energy costs, alongside government backing for AI infrastructure.

He pointed to Saudi Arabia’s Humain initiative and investment through G42 and Khazna in the UAE as developments expanding the region’s computing capacity.

Globally, AI demand is increasing the scale and complexity of data centre projects while putting further pressure on labour, equipment and power supplies. Some 52% of respondents expect more than half of their projects in 2027 to support AI workloads.

More than half of those surveyed reported construction cost increases above 6% in 2026, with approximately one in five reporting inflation above 15%.

Power remains another constraint: 56% identified it as a major obstacle to successful delivery. Some 52% said utility connections typically take between one and two years, while 32% reported waits exceeding two years.

Paul Barry, Turner & Townsend’s Data Centre Construction Cost Index lead, said larger AI facilities were adding to delivery challenges.

“AI-driven demand for gigawatt-level power and liquid cooling for increased rack densities is driving the growth of larger-scale data centres, but the shortage of skilled labour and the greater risks involved in the delivery of larger more complex projects is driving a cost premium.”