The cost of constructing data centres in Europe continued to rise in 2026, with Zurich and the Nordic capitals amongst the world’s most expensive locations, according to the latest research from Turner & Townsend, the global programme management company.
Turner & Townsend’s Data Centre Construction Index (DCCI) report, now in its 10th edition, is the leading global benchmark for data centre construction costs, drawing on over 500 live or recently completed projects in 62 markets, and supplemented by a survey of over 400 experts working across the global data centre industry.
The research reveals that Zurich is the 3rd most expensive location globally for data centre construction ($/W), averaging $15.93, behind only Japan’s key markets of Tokyo and Osaka. Across Europe, data centre construction costs rose (by 13%) to $12.76, making Europe the most expensive region with the greatest year-on-year rise in costs globally.
18 European locations featured in the top 62 locations globally, with Copenhagen ($14.41), Oslo ($13.95), Stockholm ($13.92), and Helsinki ($13.33) appearing in the top 10 most expensive locations, and Paris ($13.12), London ($12.95), Berlin ($12.79), Amsterdam ($12.64), and Dublin ($12.60) featuring in the top 20.
One of the main drivers of rising construction costs is a skills crisis, as surging AI demand requires increasingly complex and large-scale data centre projects, which require more technical and project management experience to deliver. This is heavily impacting the market in Europe, where just 19% of respondents believe contractor capacity is manageable, compared to 52% of respondents globally.
Niall O’Reilly, Director and Data Centre lead for Europe at Turner & Townsend, comments: “Europe is seeing strong demand for new, next-generation data centre projects and many of the most attractive locations, such as Scandinavia, benefit from the affordable, renewable power and cooler climates which are well suited to higher density designs. However, this demand is exceeding contractor capacity and pushing up the cost of construction in locations like Copenhagen, Oslo, Stockholm, Helsinki and others. We are also seeing an increase in data centre activity across many Eastern European countries, including Hungary, Bulgaria and Slovenia and in warmer climates too, such as Greece.
“The European Union is seeking to unlock over €30 billion in public-private co-financing to support the development of AI gigafactories, which is part of a broader global trend towards policymakers establishing funding and regulatory incentives for development. However, it is clear that in a global race driven by AI, Europe is facing a major skills shortage and risks losing out to international competitors on the technical expertise and leadership experience needed to deliver major data centre projects.”
Global data centre construction costs rise as AI drives race to deliver mega projects
Data centre construction costs continued to rise globally in 2026, as surging demand for AI computing power and large-scale data centre projects outpaced the supply of powered land and skilled labour to deliver them.
Despite some stabilisation in cost inflation in 2026, structurally higher construction costs and risk are increasingly priced into contracting, while a deepening skills shortage is putting pressure on labour costs. The rising costs of data centre construction are increasingly driven by the growing scale of the builds, particularly for AI facilities, which require alternative delivery approaches, technical specialists and new risk-balanced models to overcome strained capacity and accelerate schedules. 52% of respondents anticipate a majority (>50%) of their 2027 projects will be data centres to support AI workloads.
52% of survey respondents experienced cost increases in 2026 above 6%, with approximately 20% reporting inflation above 15%. In 2027, 28% of global respondents expect inflation to be between 1-5%, indicating a continued softening of cost pressure. 57% of respondents expect inflation to be below 15%.
56% of survey respondents identified power as a major obstacle to successful delivery, with over half (52%) reporting that utility connections typically take between one and two years, and almost a third (32%) reporting timeframes over two years.
The highest cost locations ($/W) in the index were Tokyo ($18.28), Osaka ($17.15), Zurich ($15.93), Singapore ($15.39) and Silicon Valley ($15.01). While Japan holds the top spot in the index, the fact that 17 European and 13 North American markets make up almost half of the top table reflects these regions’ continued dominance of the industry. Around half of all global data centres are in North America, and a quarter are in Europe.
By contrast, the lowest cost locations ($/W) in the index were Shanghai ($5.79), Mumbai ($6.83), Ho Chi Minh City ($8.32), Bogota ($9.13) and the UAE ($9.20). These emerging data centre markets provide cheaper labour and greater access to it.
Paul Barry, Data Centre Construction Cost Index Lead at Turner & Townsend, comments: “Over the decade since we first published our construction cost index, we have seen the data centre industry completely transformed, with capital expenditure on data centres now US$800 billion per year, and expected to reach US$1.8 trillion by 20501. AI’s exponential demand for computing power, combined with cloud adoption and the growing importance of data and sovereign capacity, is driving data centre investment and development at unprecedented scale, reshaping the construction landscape.
“However, rising material and labour costs continue to create challenges globally, while access to power, specialist equipment and skills continue to create bottlenecks. Data centres are also subject to increasing scrutiny, with political and community consent essential to delivery. AI-driven demand for gigawatt-level power and liquid cooling for increased rack densities is driving the growth of larger-scale data centres, but the shortage of skilled labour and the greater risks involved in the delivery of larger, more complex projects are driving a cost premium.”
