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Research suggests global supply shortages are challenging data centre construction

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Data centre construction

New research from Turner & Townsend has suggested that global material shortages are incurring delays and extra costs to data centre construction.

Reporting on the rising costs of data centre construction globally, The Data Centre Cost Index 2021 analysed construction costs and industry sentiment from a survey of 200 data centre professionals. 

It revealed that 84% of its respondents were experiencing shortages of skilled data centre construction teams. Construction costs rose to as much as $12.50 per watt in Tokyo, while in Silicon Valley and New Jersey the cost rose to $10.30/w this year, compared to $9.80 last year. 

The FLAPD (Frankfurt, London, Amsterdam, Paris and Dublin) markets saw prices stabilise or fall, however. With competition for data centre projects in the UK high due to post-Brexit and post Covid-19 travel and working regulations, London showed construction costs per watt remaining stable at $9.10/w.

A majority of 70% of those surveyed viewed data centres as a recession-proof industry, and 95% expected demand for data centres to increase over the next year. However, 87% agreed that material shortages were causing delays to construction and contributing to escalating costs, highlighting the challenge of ensuring supply meets demand.

Only 29% reported using modern methods of construction on data centre projects, and there was an even divide among respondents on whether data centre owners and operators had a clear route map to achieving net zero. Only 40% believed net zero carbon data centres to be achievable within five years.

Dan Ayley, Global Head of Hi-tech and Manufacturing at Turner & Townsend, said, “This year’s index demonstrates the growing prominence and opportunity beyond the core traditional markets for data centre investment.  We are seeing growing demand and continued optimism reflected in cost inflation, but with significant headwinds on the horizon as well.

“The challenge for the global industry is how to deliver investment against a backdrop of rising material and labour costs, as well as a critical decarbonisation agenda.  The sector needs to adopt a programmatic approach which looks holistically at supply chain capability – identifying areas of innovation in build processes and ongoing operations that improve cost and carbon performance.”

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