Saudi Arabia is costliest Gulf market for data centre construction: Turner & Townsend report

What happened

Saudi Arabia is the costliest of three Gulf markets for data centre construction in Turner & Townsend's index, averaging $10.80 per watt. A typical 60-megawatt facility there costs an estimated $10.80 per watt, ranking it 40th of 62 markets. Qatar follows at $9.80 and the UAE at $9.20 per watt.

Confirmed

Global impact / market context

Higher building costs per watt mean Saudi developers must spend more money for each unit of computing power. That can slow project economics, raise upfront funding needs and pressure profit per sale, while the UAE's lower costs may attract hyperscale and AI investors faster.

Analyst inference

All three Gulf markets average $9.93 per watt, cheaper than Europe at $12.76, Asia at $12.10 and North America at $12.06. Low construction and energy costs plus government support for AI infrastructure position the region as a competitive hub for data centre investment.

Analyst inference

What to watch

1. Saudi Arabia's HUMAIN initiative and the UAE's investment through G42 and Khazna are expanding regional computing capacity, which the report links to sovereign AI and government-backed digital infrastructure. Confirmed
2. Watch whether Saudi Arabia's higher cost of $10.80 per watt slows new 60-megawatt project approvals or shifts developer capital toward Qatar and the UAE, where costs are lower. Analyst inference
3. Track construction cost trends in the next index, since falling costs would improve project profit per sale and could attract more hyperscale tenants to Gulf facilities. Analyst inference

Evidence

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