Singapore ranked as the world’s second most expensive data centre market in 2024

SINGAPORE: Singapore has been ranked the second most expensive market in the world for data centre construction in 2024, according to the latest Turner & Townsend Data Centre Cost Index.

The cost of building a data centre in Singapore reached $18.09 per watt, a significant jump from its fifth-place position in 2023. This rise reflects a continuing supply-demand imbalance in the city-state’s digital infrastructure sector.

The only market surpassing Singapore globally is Tokyo, which tops the index with data centre construction costs of $18.74 per watt.

Meanwhile, Jakarta, which ranked seventh in 2023, dropped to fourteenth place in the latest index, with costs of $14.42 per watt.

Arunava Parial, Turner & Townsend’s director and data centre cost index lead in Asia, attributed the rising costs across the region to a surge in demand driven by the rapid adoption of digital technologies, cloud computing, IoT, and AI.

He noted that the growing popularity of generative AI is particularly driving the need for localised data centres with larger rack densities, especially in Tier 2 and Tier 3 cities across Southeast and Southern Asia.

While Tokyo and Singapore remain major hubs for data centre development, emerging markets such as Seoul and Mumbai are gaining attention for future projects.

Other cities being explored as potential data centre construction alternatives include Osaka, Hyderabad, Chennai, Johor, Delhi NCR, Manila, Batam, Pune, Taipei, Guangzhou, and Bangkok.

Despite the challenges surrounding power availability in leading Asian markets like Tokyo and Singapore, Parial noted that locations such as Mumbai and Jakarta continue to benefit from robust grid connectivity, making them more favourable for meeting current and future demand.