Singapore has emerged as the second most expensive market globally for data centre construction, according to the 2025 Data Centre Construction Cost Report by Turner & Townsend. The report reveals that construction costs in Singapore have reached US$14.53 per watt, marking a 5% increase from the previous year. This surge is attributed to the growing demand for AI-powered infrastructure and the integration of advanced cooling technologies.
The report, which analyses data centre construction costs across 52 global markets, highlights a significant rise in capital expenditures driven by AI demand. These expenditures have increased by 20-40% due to the need for upgraded electrical infrastructure and advanced cooling systems. Additionally, the report notes persistent challenges in power access and procurement, with lead times for critical equipment such as switchgear extending from nine to 18 months, thereby delaying project timelines.
Despite these rising costs, Singapore remains an attractive hub for AI-powered digital infrastructure investments. The city-state’s policy stability, regulatory maturity, and alignment with environmental, social, and governance (ESG) principles contribute to its resilience in the sector. Alex Quek, Project Director at Turner & Townsend, emphasises Singapore’s position as Asia’s leading hub for AI-powered data centres, noting its infrastructure and policy stability as key factors attracting investment.
The report underscores the importance of sustainability in shaping the future of data centre development in Singapore, with innovative approaches needed to overcome challenges in cooling technology and supply chain management. As the demand for AI workloads grows, Singapore continues to adapt to the increasing power demands, maintaining its status as a pivotal player in the global data centre landscape.
