Demand for data centre construction at ‘all-time’ high

Construction of data centres is at an all-time high. Image: Adobe Stock

Data centre construction has struggled to meet industry demand in 2023, according to new report from Turner & Townsend.

The Data cente cost index 2023 revealed that 83% of respondents said that data centre construction has struggled to meet industry demand in 2023. This increased demand has not been cooled by rising costs, with the average cost of data centre construction globally up by 6%. This follows on from costs increasing by 8% in 2022.

The sector is also suffering from labour and material supply constraints, with over 80% of respondents reporting delays to projects in the past year due to global material shortages. Over a third of those delays were 12 weeks or more.

Faced with constraints in the supply chain, some are exploring creative ways of expanding the potential pool. For instance, 66% report that data centres are being delivered using alternative procurement models in order to meet demand. Clients are adapting procurement models, moving away from single general contractor procurement to major packages, such as shell and core and fit out and blending the use of local and international contractors. 

As well as re-evaluating how to procure, many are also ordering long-lead-time items before designs are complete, while others are moving to greater pre-fabrication.

The report also revealed the most expensive places in which to build data centres:

Tokyo, Japan

Zurich, Switzerland

Silicon Valley, US

New Jersey, US

Singapore