Singapore ranks second globally in data centre construction costs

Despite this, the report said Singapore remains a resilient and attractive destination for data centre investment.

Singapore now ranks as the world’s second most expensive market for data centre construction, with average build costs reaching $19 per watt (US$14.5), according to a report from Turner & Townsend.

This marks a 5% YoY increase and places Singapore behind Tokyo but ahead of Silicon Valley.

The surge in construction costs is being driven largely by AI workloads, which are significantly increasing power density requirements. Advanced sites are now provisioning 100 to 120 kilowatts per rack, up from the previous norm of 3 to 4 kW.

Turner & Townsend noted this shift is inflating capital expenditure by 20–40% due to the need for upgraded electrical infrastructure and advanced cooling technologies.

Liquid cooling is gaining ground as a preferred solution to meet these new demands. Between 26% and 50% of current projects are using liquid-cooled environments, and this is projected to rise to 51–75% within the next 12 to 24 months.

However, supply chain pressures remain a major concern. Key components such as switchgear and high-spec cooling systems are experiencing lead times of 9 to 18 months.

In the Asia-Pacific region, design changes are the top schedule risk, cited by 30.6% of respondents. Globally, extended utility connection lead times (33.3%) are the main constraint on delivering sufficient power to data centre sites.

In Singapore, new sustainability regulations are also contributing to cost pressures. The SS 715:2025 standard aims to cut energy use by up to 30% and mandates a Power Usage Effectiveness (PUE) of 1.3 or lower.

Despite the rising costs, Turner & Townsend said Singapore remains a resilient and attractive destination for data centre investment, underpinned by regulatory stability and pro-digital policies.

The firm advised clients to reassess procurement strategies, explore energy-efficient design approaches, and consider off-grid power solutions to manage connection delays.

In comparison, neighbouring markets offer lower construction costs, including Malaysia (US$11.37/W), Jakarta (US$11.21/W), and Mumbai (US$6.64/W).

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