Singapore’s data center market continues to anchor Asia’s digital infrastructure landscape, ranking as the second most expensive market globally in Turner & Townsend’s data center construction cost index 2025.
Turner & Townsen said in a statement on Thursday that with a construction cost of $14.53 per watt, up from $13.80 per watt last year, Singapore ranks just behind Tokyo and ahead of Silicon Valley.
This increase reflects the growing demand for artificial intelligence (AI)-ready infrastructure and advanced liquid cooling technologies that are transforming design, performance, and delivery timelines across the Asia-Pacific region.
It is noted that as the demand for AI-driven data centers rises, design standards and cost structures are evolving rapidly.
Power requirements are increasing significantly, with power needs rising from 3-4 kW/rack to 100-120 kW/rack in advanced facilities.
This shift is pushing capital expenditures up by 20 percent to 40 percent, largely due to the integration of advanced cooling systems and upgraded electrical infrastructure.
However, these transformations come with challenges that developers must navigate to meet the demands of the AI-driven data center market.
According to Turner & Townsend, project schedules in the Asia-Pacific region face significant delays, with design changes cited as the top challenge (30.6 percent of respondents).
Globally, long lead times for utility availability are the primary power-related constraint (33.3 percent).
In Singapore, while the supply chain is improving, specialized equipment and skilled labor for advanced cooling remain in short supply, extending lead times.
Additionally, delays in sourcing critical equipment, particularly for high-density and liquid cooling systems, add complexity to modular campus developments.
While AI and sustainability are regional trends, Singapore’s cost dynamics are uniquely intense due to its market maturity and regulatory landscape.
Stricter environmental regulations, including the new SS 715:2025 mandate for up to a 30 percent reduction in energy consumption and a focus on achieving a low Power Usage Effectiveness (PUE) of 1.3 or lower, are contributing to higher costs.
Additionally, complex design requirements further escalate engineering and construction expenses, making development in Singapore more costly compared to other markets in the region.
Meanwhile, nearly half (48 percent) of respondents globally stated that power availability is the most prominent obstacle to delivering projects on schedule.
In Singapore, this condition presents a different challenge, with power availability being determined by clear environmental, social, and governance (ESG) alignment.
Only projects with strong ESG alignment and low-carbon outcomes are considered for power allocation, and developers must present robust sustainability plans to qualify.
Despite these constraints, Singapore’s long-term policy stability and clear ESG mandates provide strong investment assurance, helping mitigate the regulatory uncertainty faced in other markets.
The report also advises clients to review their procurement models to help strengthen the supply chains and support the delivery of urgently-needed AI data centers.
Innovation will also be required to develop and deliver more energy-efficient designs and mitigate the risks of power connection delays.
“Singapore is emerging as Asia’s most sustainable and stable command center for AI-powered digital infrastructure,
“With unmatched connectivity, regulatory clarity, and ESG leadership, Singapore is the premium destination for next-gen data centers,” said Alex Quek, Director at Turner & Townsend, Singapore.
According to him, Singapore leads the region in digital infrastructure maturity, making it the go-to hub for hyper scalers and AI- driven innovation.
“Backed by a national strategy and robust policy, Singapore offers long-term certainty for ESG-aligned and AI-centric investments,” he added.
Paul Barry, Data Centers Sector Lead, North America at Turner & Townsend, also said data centers are increasingly at the forefront of many governments’ long-term policy
ambitions and their significance is better understood and recognized – providing greater opportunities for clients in the sector.
“Yet our report highlights key challenges that must be addressed to avoid putting a brake on investment and the benefits of AI transformation,” he said.
He also said power availability remains a critical barrier, with long-lead times for grid connection the main constraint.
According to him, there is also stronger competition than ever before for power due to both increased business and consumer demand placing added pressure on grids.
“Developers and operators must adapt quickly to the evolving market landscape. AI data centers are more advanced, larger, and by extension, costlier,
“They come with greater power demands and modern cooling solutions. Clients need to navigate the power conundrum with greater openness to off-grid design solutions, while also securing reliable supply chains capable of providing the technology and talent needed for this new wave of data centers,” he added.
Additionally, among the markets in Asia Pacific, Malaysia ($11.37 per watt), Jakarta ($11.21 per watt), and Mumbai ($6.64 per watt), offer significantly lower construction costs, signaling strong potential for investment and expansion, said the report.
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