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AI Data Centre Demand Is Tightening Singapore’s Construction Market
Turner & Townsend forecasts Singapore construction cost inflation at about 4% in 2026, up from 1% in 2025. The report describes data centres as a particularly constrained segment; reported figures also point to skilled labour and MEP shortages across Asian markets.
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Key takeaways
- Turner & Townsend forecasts Singapore construction cost inflation at about 4% in 2026, up from 1% in 2025.
- The report describes data centres as a particularly constrained segment; reported figures also point to skilled labour and MEP shortages across Asian markets.
- Singapore ranks 55th globally for construction cost in the cited report, at S$4,437.08 (US$3,439.80) per square metre.
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openai.comCreate a landscape editorial hero image for this Studio Global article: According to Turner & Townsend’s 17th annual Global Construction Market Intelligence report, covering 112 markets across 44 countries, how i. Article summary: Singapore’s construction cost inflation is forecast to rise from 1% in 2025 to 4% in 2026—a three-percentage-point increase—as growing demand for AI infrastructure, particularly data centres, puts pressure on constructio. Topic tags: general, general web, user generated, news. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts w
Singapore’s construction cost inflation is forecast to rise from 1% in 2025 to approximately 4% in 2026. Turner & Townsend links the tightening outlook to growing demand for AI infrastructure, especially data centres, alongside wider pressure on construction capacity and skilled labour in Asia. 11
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Why costs are under pressure
AI-related data centre projects are competing for construction capacity and specialist workers. Turner & Townsend’s 17th annual Global Construction Market Intelligence report covers 112 markets across 44 countries and identifies rising AI infrastructure demand as a source of pressure on construction capacity and skilled-labour availability. 11
A report summarising the Asian findings says nearly 70% of surveyed markets faced tight or severely constrained capacity for data centre projects. The same report says 90% of Asian markets reported a significant impact from skilled-labour shortages, while 82% reported shortages in mechanical, electrical and plumbing (MEP) trades. 23 These figures indicate broad regional strain; they do not mean every market faces the same conditions.
MEP specialists are especially relevant to data centres because their work supports the facilities’ mechanical and electrical systems. The available report summary describes these skills as important to both data centre construction and operation. 23
Pressure reaches beyond data centres
The capacity squeeze is not confined to digital infrastructure. Industrial and logistics projects are expanding as companies reconfigure supply chains and invest in automation. 23
The same summary ranks residential housing as Asia’s strongest-performing construction sector, followed by data centres, industrial and logistics developments, and office fit-outs. 23 This is a relative sector assessment, not a claim that every market has the same project mix or growth pattern.
Singapore’s cost position
The cited market report ranks Singapore as the world’s 55th most expensive construction market, with average construction costs of S$4,437.08 (US$3,439.80) per square metre. 24 That general construction-cost benchmark is distinct from the separate data-centre cost index, which measures data-centre construction on a per-watt basis.
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The inflation forecast also needs context: Turner & Townsend’s Singapore outlook describes the 2026 figure as approximately 4%, subject to further global uncertainty. 12 It is a forecast, not a guaranteed outcome, and the available evidence does not isolate AI demand as the sole cause of the projected increase.
What the regional outlook means
Sumit Mukherjee, Turner & Townsend’s managing director for Southeast Asia and head of real estate for Asia, says cost remains important but that attention is shifting towards “value, efficiency and supply chain resilience.” 2 In a market where data centre projects compete for capacity and specialist labour, those priorities underline why delivery capability and reliable supply chains matter alongside the headline price.
The available source excerpts do not establish the exact number of Asian markets classified as “hot” or “overheating,” or fully detail their investment drivers. Those figures should not be inferred from separate data-centre cost indexes or from another edition of the market report.
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What is the short answer to "AI Data Centre Demand Is Tightening Singapore’s Construction Market"?
Turner & Townsend forecasts Singapore construction cost inflation at about 4% in 2026, up from 1% in 2025.
What are the key points to validate first?
Turner & Townsend forecasts Singapore construction cost inflation at about 4% in 2026, up from 1% in 2025. The report describes data centres as a particularly constrained segment; reported figures also point to skilled labour and MEP shortages across Asian markets.
What should I do next in practice?
Singapore ranks 55th globally for construction cost in the cited report, at S$4,437.08 (US$3,439.80) per square metre.
Sources
turnerandtownsend.comGrowth of AI infrastructure driving job creation i...
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