November 07, 2025: Mumbai has been ranked the world’s second most cost-efficient city for data centre construction, according to Turner & Townsend’s 2025 Data Centre Construction Cost Index. The city recorded an average construction cost of USD 6.64 per watt, placing it 51st out of 52 global markets surveyed — just ahead of Johannesburg. In contrast, Tokyo, Singapore, and Zurich were identified as the most expensive locations for building data centres.
The report revealed that global construction input cost inflation for data centres averaged 5.5% in 2025, driven by supply chain constraints and growing power demand. The study noted that the rapid rise in artificial intelligence (AI) workloads is pushing rack densities to between 100 and 150 kilowatts per rack, exerting significant pressure on existing energy and cooling systems.
Sumit Mukherjee, Managing Director for Real Estate in Asia, said, “AI-led demand is accelerating capacity requirements, but power and supply chain limitations remain significant challenges.” Paul Barry, Data Centres Sector Lead for North America, added, “Developers must adapt designs and procurement models to ensure energy efficiency and future scalability.”
The report projected that power consumption across Asia-Pacific data centres could increase by 165% by 2030 due to AI-driven growth. It further found that 83% of respondents believe current supply chains are unprepared to meet the demand for high-density cooling systems required by AI applications.
Turner & Townsend attributed India’s competitive advantage to lower labour and land costs, as well as cheaper electricity tariffs — 6.71 US cents per kilowatt hour in Mumbai compared to 10.09 US cents in Shanghai. Developers are now exploring secondary Indian markets to leverage these cost benefits.
The report urged developers to strengthen supply chains, adopt energy-efficient designs, and consider renewable or off-grid solutions to address power-connection delays as AI continues to reshape global data centre infrastructure.
Source: Construction Week
