Construction and sustainability costs keep Singapore the world’s second-most expensive market to build data centres

SINGAPORE: Rising construction costs amid the artificial intelligence push and tighter sustainability requirements have kept Singapore the second-most expensive market to build data centres globally.

According to The Asian Business Review, citing the Turner & Townsend 2025 Data Centre Construction Cost Index, construction costs in Singapore rose 5% year-on-year (YoY) to US$14.53 per watt (S$18.76), largely due to AI-ready data centres requiring 25–30 times more power per rack than traditional facilities, driven by advanced cooling needs and more complex electrical infrastructure.

The higher costs are linked to the global race to deploy AI computing capacity, said Sumit Mukherjee, Managing Director for Southeast Asia and Head of Real Estate, Asia, at Turner & Townsend.

Singapore’s sustainability standards, which require operators to cut energy consumption by 30%, are also pushing firms to invest in more efficient technologies, equipment and plants.

Still, Singapore continues to attract global data centre investors, described by Mr Mukherjee as a “blue chip market” for data centres, thanks to the city-state’s stable policies, strong regional links and solid sustainability credentials. /TISG

Read also: Smaller data centres could soon become irrelevant as rise of AI fuels demand for hyperscale facilities: Report