Global Data Center Construction Costs Surge
A new industry index finds that power constraints and rising complexity continue to drive up building costs worldwide.
Updated on Oct. 26, 2026 in Data Centers
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Turner & Townsend has released its tenth Data Centre Construction Cost Index, showing that Europe remains the most expensive region for new builds. Construction costs in the region have increased by 13% year on year as demand for complex, high-capacity facilities continues to rise.
Why it matters
Rising costs are largely driven by the explosive demand for AI-ready infrastructure, which is placing significant pressure on labor, equipment, and power supplies. As the scale of projects increases, developers are struggling to balance construction timelines with limited utility capacity.
The index calculates indicative costs based on a standard 60MW design across 62 global markets. Current regional averages include $12.76 per watt in Europe and $9.93 per watt in the Middle East, with individual costs ranging from $18.28 in Tokyo to $5.79 in Shanghai.
The players
Turner & Townsend
This professional services firm specializes in program management, project management, and cost and commercial management for large-scale infrastructure and real estate projects.
The details
The research draws from over 500 active or recently completed projects to highlight how AI workloads are reshaping site requirements. Approximately 20% of industry experts noted construction inflation exceeding 15% during 2026.
Timeline
Construction inflation data was reported throughout 2026.
Industry experts project that 52% of projects will support AI workloads by 2027.
The Tech Race
As AI workloads demand greater computing power, the industry is transitioning from standard builds toward specialized, high-energy facilities that require more robust power infrastructure. This evolution reflects a broader arms race where capacity, rather than just location, defines competitive advantage for data center operators.
Rising construction costs for data centers may lead to higher service prices as operators look to recoup capital expenditures on new builds. Users may also experience longer lead times for cloud computing resources as the industry navigates significant power and supply chain constraints.
The takeaway
Developers and investors are increasingly prioritizing sites with reliable, scalable power access to mitigate rising delivery costs. Strategic planning for AI-ready projects requires accounting for sustained inflation and the growing complexity of large-scale electrical requirements.
Further reading
Explore the evolving infrastructure demands of the sector in our Data Centers section.
Source note: This article includes information reported by Construction Briefing.
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