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The Middle East has the lowest regional data-centre construction cost in Turner & Townsend’s 2026–27 Data Centre Construction Cost Index, averaging US$9.93 per watt for its benchmark design. The UAE is the least expensive of the three listed Gulf markets at US$9.20/W, followed by Qatar at US$9.80/W and Saudi Arabia at US$10.80/W. Those figures make the region attractive for hyperscale and AI-infrastructure investors, but they are indicative construction benchmarks—not turnkey project prices. Land, utility works, active IT equipment and several other major costs are excluded.
How cheap is data-centre construction in the Middle East?
On Turner & Townsend’s regional comparison, the Middle East averages US$9.93/W, below Europe at US$12.76/W, Asia at US$12.10/W and North America at US$12.06/W. The index covers 62 markets, more than 500 live or recently completed projects and a survey of 401 industry leaders.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors| Market | Indicative construction cost | Global rank |
|---|---|---|
| United Arab Emirates | US$9.20/W | 58 |
| Qatar | US$9.80/W | 53 |
| Saudi Arabia | US$10.80/W | 40 |
The UAE’s US$9.20/W is also one of the lowest individual market figures in the full index. A lower number indicates a more competitive baseline for the construction scope modelled; it does not establish that every site, design or procurement route will cost less.
Why does the region rank so well?
Turner & Townsend attributes the Middle East’s position to comparatively low construction and energy costs, government backing for AI infrastructure and continuing investment in hyperscale capacity. Regional programmes and major operators are expanding capacity aimed at cloud services and high-performance computing.
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Government-backed AI demand
The TradeArabia summary of the index cites Saudi Arabia’s HUMAIN initiative and investment in the UAE through G42 and Khazna as examples of policy and corporate momentum. Such programmes can improve demand visibility, help assemble financing and support strategic power and land decisions, although they do not remove project-execution risks.
Energy economics and scale
Electricity is a major operating cost over a facility’s life, while utility capacity and connection timing can determine whether a project is viable at all. The region’s stated energy-cost advantage is therefore relevant to both construction siting and long-term operating models. Investors still need a site-specific assessment of tariff structure, reliability, transmission capacity and the schedule for energisation.
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The UAE has the lowest listed figure at US$9.20/W, Qatar follows at US$9.80/W, and Saudi Arabia is highest of the three at US$10.80/W. The ranking is useful for initial screening, but it should not be treated as a complete location decision.
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United Arab Emirates
The UAE combines the lowest benchmark in the table with active AI and data-centre investment. A prospective project still has to verify available powered land, connection dates, cooling-water or air-management requirements, local approvals, data-sovereignty obligations and the capacity of specialist contractors.
Qatar
Qatar’s US$9.80/W places it close to the UAE in the index. The practical question for a new facility is whether a particular industrial zone can provide the required power, network routes, high-density cooling and delivery workforce on the investor’s timetable.
Saudi Arabia
Saudi Arabia’s US$10.80/W is higher than the other listed Gulf markets but remains below the regional and most comparison-region averages. Its HUMAIN-linked AI ambitions may support large-scale demand, while project economics will depend on local utility, labour, permitting and supply-chain conditions.
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What can make an AI data centre more expensive?
AI facilities are generally larger and more technically demanding than the air-cooled hyperscale baseline used for the index. Turner & Townsend identifies liquid cooling, higher rack densities, specialist engineering, accelerated schedules and alternative delivery models as cost pressures.
In its US analysis, the firm estimates an approximately 10% construction premium for AI-ready facilities. Advanced AI-specific facilities are put at roughly US$14–US$16/W, compared with a US average of US$12.08/W. That US comparison is not a Gulf-market price; it illustrates why a conventional regional benchmark should not be applied unchanged to an AI design.
What risks can erase the headline saving?
Cost inflation and delivery capacity remain material concerns. In the 2026 survey, 52% of respondents reported cost increases above 6%, about 20% reported inflation above 15%, and 81% said skilled labour was constrained in their region. North American and European average costs rose 13% year on year, versus 6% globally.
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- Power access: A low construction rate is irrelevant if grid reinforcement or a connection agreement delays energisation.
- Specialist labour: Shortages can raise wages, extend schedules and force reliance on imported expertise.
- Cooling and equipment: Liquid-cooling systems, high-capacity electrical gear and other specialist components may have long lead times.
- Programme complexity: Fast AI build-outs can require different contracting and sequencing models from a standard build-to-suit project.
What exactly does the US$9.93/W benchmark include?
The index converts project costs into US dollars using the average exchange rate from 1 October 2025 to 1 October 2026. Its baseline is a typical 60 MW IT-load, air-cooled, build-to-suit hyperscale data centre.
The methodology excludes land purchase, utility works, abnormal groundworks, site works, active IT equipment, fibre cabling for office fit-outs and professional-services fees. Turner & Townsend says multi-client colocation and enterprise facilities can differ from the indicative US$/W benchmark by up to 15%.
Consequently, the index is best used as an early market-screening tool. A bankable project budget needs a site survey, utility and permitting checks, equipment quotations, schedule risk allowances, tax treatment and a design that reflects the intended computing workload.
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How should investors use the index?
- Screen markets: Use the regional and country figures to identify locations worth detailed investigation.
- Confirm power: Obtain written information on grid capacity, connection scope, reliability, tariffs and energisation dates.
- Model the workload: Separate conventional air-cooled capacity from AI halls requiring liquid cooling and higher power density.
- Add excluded costs: Price land, utility works, abnormal ground conditions, active IT, professional fees and network requirements.
- Stress-test delivery: Allow for inflation, labour constraints, long-lead equipment and schedule slippage.
Frequently Asked Questions
Does US$9.93 per watt mean a complete Middle East data centre can be built for that amount?
No. It is an indicative construction cost for a defined 60 MW, air-cooled hyperscale design. Land, utility works, active IT equipment, abnormal groundworks, some site works and professional fees are outside the benchmark.
Is the UAE automatically the best place for an AI data centre?
No. The UAE has the lowest listed construction figure, but AI projects also need high-capacity power, advanced cooling, specialist contractors, suitable network routes and compliant data handling. Those factors can outweigh a small difference in headline construction cost.
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How much more can a colocation project differ from the index benchmark?
Turner & Townsend’s methodology says multi-client colocation and enterprise facilities can differ from the indicative US$/W figure by up to 15%. The direction and size of the difference depend on the facility’s design and commercial model.
Why is skilled labour such an important issue for Gulf data-centre projects?
The 2026 survey found 81% of respondents experienced constrained skilled labour in their region. Limited availability can increase labour rates, lengthen commissioning and make specialist engineering capacity a schedule-critical resource.
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