Data centre developers across the globe are rapidly shifting focus toward facilities capable of supporting artificial intelligence (AI) workloads, but a new report warns that the complex demands of these advanced centres may be outpacing supply chain readiness.
Turner & Townsend’s 2025‑2026 Data Centre Construction Cost Index reveals that 83 per cent of data centre industry experts do not believe supply chains are well equipped to deliver the advanced cooling technology required for AI data centres.
The professional services firm’s annual survey also found that power availability is now viewed as the biggest single challenge to delivering projects on schedule, as operators continue to grapple with securing timely access to energy grids.
The report identifies 2025 as a tipping point for the data centre industry, as it transitions from traditional cloud‑based, air‑cooled facilities to high‑density, liquid‑cooled designs purpose‑built for AI.
According to Turner & Townsend, global construction cost inflation for traditional data centres is averaging 5.5 per cent in 2025 amid persistent demand pressures.
For the first time, the company has benchmarked costs between traditional and AI‑specific projects in the United States, revealing a 7–10 per cent construction cost premium for AI‑enabled facilities of comparable IT capacity.
The difference underscores the higher technical complexity and infrastructure demands associated with supporting AI workloads.
While rising costs remain a concern, the survey indicates the sector’s more urgent challenges stem from power and supply chain constraints.
83 per cent of respondents said local supply chains are not well prepared to support the growing adoption of advanced cooling techniques required for high‑density data centres.
Meanwhile, 48 per cent cited power availability as the most prominent obstacle to keeping projects on schedule — a factor intensifying as AI data centres consume more power per rack than ever before.
The cost index highlights wide regional variations in construction expenses.
Among Australia and New Zealand’s major markets, Auckland is the most expensive at US$12.30 per watt, followed by Sydney at US$10.56 and Melbourne at US$10.40.
Across the Asia‑Pacific region, Tokyo and Singapore rank as the two most costly markets globally at US$15.2 and US$14.5 per watt, with Zurich close behind at US$14.2.
These markets remain pivotal regional hubs yet face high construction costs amid sustained demand.
New Zealand’s data centre industry is gaining international attention as a sustainable and scalable alternative.
The country’s growing sector is underpinned by strong renewable energy resources and adaptable delivery strategies.
Australia, in contrast, faces mounting challenges linked to power and water use, with data centres already accounting for around 4 per cent of national electricity consumption in 2024 and forecasts suggesting it could reach 7 per cent by 2029.
Simon Kearney, Data Centres Sector Lead for Australia and New Zealand at Turner & Townsend, said: “Investment into the Australia and New Zealand data centre sector continues to see solid growth in 2025 driven by AI and cloud computing.
“Data centre capacity is projected to more than double in the region over the next five years, with forecasts suggesting it could exceed 5GW.”
Kearney noted that global investors and hyperscale operators are continuing to compete for future capacity, with many acquiring sites and securing land in anticipation of further growth.
He said New Zealand is proving to be a viable and scalable alternative to crowded international hubs, well placed to serve the expanding AI, cloud and enterprise markets.
In contrast, he added, Australian developers are navigating increasingly strict regulatory and environmental frameworks, underscoring the need to adopt creative strategies such as co‑locating with renewable energy and storage projects rather than depending solely on the grid.
To meet demand and manage delivery risk, developers are turning to phased builds, powered shell strategies and modular construction models to accelerate time‑to‑market and spread capital expenditure.
Turner & Townsend advises clients to review procurement approaches to help reinforce supply chain capacity and enable the delivery of urgently needed AI data centres.
Innovation, the firm says, will be critical in designing more energy‑efficient facilities and mitigating risks related to power connection delays.