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Turner & Townsend, a leading global professional services company in the construction industry, has released its inaugural Middle East Data Centre Market Analysis, highlighting substantial growth in a market expected to double in size by decade end.
Saudi Arabia and the UAE are leading demand for cloud services across the 7 GCC countries – also comprising Bahrain, Kuwait, Oman and Qatar - due to their governments' strategic efforts to build their digital economies, including the increasing uptake of IoT and AI.
Furthermore, emerging Microsoft Azure Availability Zones in the UAE, Google collaborations, and planned AWS and Oracle Zones in Saudi Arabia are underpinning market growth. It means both Saudi Arabia and the UAE have emerged as key regional data centre hubs, each strategically positioned as a crucial gateway for data traffic between Europe, Asia, and Africa.
The report also shows year-on-year cost inflation across the Middle East, as the data centre industry continues to emerge off the back of rising demand for data storage. Riyadh is a new entrant to the index with an average cost of US$10/W. Investors continue to watch with interest, as digital connectivity and investment continue to rise in support of Saudi Arabia’s national building programme and expanding range of giga-projects.
Data centre construction risk and mitigations also feature in the findings. To ensure effective design and construction of data centres, it is essential to incorporate several elements into project procurement strategies. This includes using tried and tested models, solidifying the programme delivery approach, investing time and resources into holistic contract management, choosing the right procurement route, engaging with the local supply chain, proactive design scheduling, and establishing a robust regulatory compliance and approval roadmap.
Commenting on the report, Ajay Mangara Associate Director and Data Centre Lead, Middle East said:
“We’re seeing the Middle East attract investment from major cloud providers, as the market sets to double in size by 2030. In particular, Saudi Arabia and the UAE are propelling growth with initiatives such as ‘KSA Vision 2030’ and ‘UAE Vision 2031', helping accelerate demand and attracting investment from major cloud providers.
“Global connectivity and content consumption will continue to drive data centre growth, requiring robust infrastructure and scalable solutions in the region. To maintain investment and meet demand, a proactive regulatory roadmap is key to addressing data centre design and planning challenges, and a shortage of skilled professionals. Data centre developers also must implement tried and tested models and engage with the supply chain to ensure the rapid move towards digitilisation, including smart city initiatives, and AI adoption is met.”
1 Middle East data centre market analysis: Turner & Townsend, a global consulting business serving clients across real estate, natural resources, and infrastructure, has compiled a data centre report from key industry sources and in-house subject matter experts in the Middle East. The report evaluates the region’s opportunities, construction costs, challenges, and how to mitigate construction risks.
About Turner & Townsend
Turner & Townsend is a global professional services company with over 10,000 people in 48 countries. Collaborating with our clients across real estate, infrastructure, and natural resources sectors, we specialise in major programmes, programme management, cost and commercial management, net-zero, and digital solutions.
We are majority-owned by CBRE Group, Inc., the world’s largest commercial real estate services and investment firm, with our partners holding a significant minority interest. Turner & Townsend and CBRE work together to provide clients with the premier programme, project and cost management offering in markets around the world.
We are passionate about making the difference, transforming performance for a green, inclusive, and productive world.
