The complex requirements of new data centres that are capable of supporting AI workloads may be outpacing supply chain preparedness, says professional services company Turner & Townsend in its ‘2025-2026 Data Centre Construction Cost Index’.

The latest Index indicates that this year is an inflexion point for the sector, as it moves from a focus on traditional cloud-based, air-cooled data centres to the growing dominance of high-density, liquid-cooled facilities to support AI workloads.

Data centre developers worldwide are rapidly shifting their focus to the construction of AI-capable facilities.

However, the survey of industry leaders for the report shows that power and supply chain capacity to deliver these AI data centres, rather than cost, are raising concern within the sector.

A majority of these respondents, or 83%, believe local supply chains are not well prepared to support the increased adoption of advanced cooling techniques needed for these high-density centres, says Turner & Townsend.

Further, almost half of respondents, or 48%, said power availability is the most prominent obstacle to delivering projects on schedule. This factor is becoming more significant with the ever-increasing power density of AI data centres, the report adds.

The report recommends a review of procurement models to help strengthen the supply chains and support the delivery of urgently needed AI data centres.

Innovation will also be required to develop and deliver more energy efficient designs and mitigate the risks of power connection delays, it adds.

Analysis of the current cost per watt to build data centres in 52 markets worldwide shows cost inflation for traditional data centres worldwide averaging 5.5% this year.

The report also identified a 7% to 10% construction cost premium between traditional and AI data centres in the US by comparing projects of similar IT capacity, which demonstrates the cost impacts of the more technically complex AI-supporting facilities.

AFRICA
Meanwhile, the report’s cost index compared construction costs between the African data centre markets. Lagos, Cape Town and Johannesburg are the thee most expensive, with Lagos at $10.50/W, Cape Town at $10.33/W and Johannesburg at $10.06/W.

Nairobi came in as the least expensive city in Africa at $9.74/W.

These figures reflect the evolving dynamics of Africa’s digital infrastructure landscape. Maturing supply chains and growing local expertise are helping to stabilise construction, particularly in newer markets.

For example, Lagos entered Turner &Townsend's 2024 index at seventh place globally in terms of construction risks, primarily owing to the very high costs of setting up new supply chains and expertise in a market which had not traditionally developed data centres or similar projects.

However, this year, with those skills and supply chains now more embedded, costs have settled significantly, and it now sits in twenty-seventh place globally.

“Africa’s data centre sector reflects a burgeoning digital landscape, fuelled by growing demand for cloud services, data storage and connectivity. Investments have surged, with global players like Microsoft, Amazon Web Services and Google committing substantial resources to establish data centres across the continent,” says Turner & Townsend data centre cost index lead Wendy Cerutti.

Microsoft’s investment of more than $1-billion in its African cloud regions, particularly South Africa and Nigeria, has catalysed infrastructure growth, enhancing both connectivity and service delivery, she notes.

“From South Africa to Nigeria, and now Ivory Coast, the momentum is undeniable. Governments are stepping up with supportive policies, and operators are responding with bold infrastructure developments. But with growth comes complexity, with regulatory delays and cybersecurity risks emerging as real challenges, and the rise of AI data centres adding new layers of technical and operational demands.

“Africa may hold 1% of global digital infrastructure, but it holds 20% of the world’s population. The opportunity lies not just in building more data centres, but in shaping a future where digital infrastructure is inclusive, resilient, and future ready,” she says.