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Turner & Townsend, an internationally renowned architectural consulting firm, surveyed the construction costs of building data centers in 32 different regions around the world. The survey setting scenario is the cost of building a new building in a 30MW ultra-large data center. The cost includes building materials, equipment, and labor costs.
In the Americas, the average construction cost of the world's largest Northern Virginia data center market is $8.1/watt. This is much more competitive than the value of the Silicon Valley market ($9.2/W) and the New Jersey Financial Service Center (up to $9.5/W). Dallas and Phoenix continued their battle to attract the attention of ultra-large suppliers with an average construction cost of $7.4/W and $7.1/W, respectively.
Toronto is a new addition to North America ($6.8/W), and its zero tax on equipment makes it more competitive than many markets in Latin America. The cost of freight in Latin America is high, and the proportion of local taxes and import duties is also high. This year, Latin America's Argentina ($6.5/W), Brazil ($6.7/W) and Chile ($6.6/W) are all attracting developers from ultra-large data centers.
In Europe, London is more expensive in the European data center market in Frankfurt, London, Amsterdam and Paris (FLAP) mature circles ($8.6/W), which is not much different from our previous years. This year's index shows that data center construction costs in Dublin have increased by 8% ($7.5/W), narrowing the gap with mature markets. It is expected that the price will increase by a similar amount in the coming year.
Copenhagen cannot be ignored this year, and it has clearly positioned itself as a very large data center destination in Northern Europe. Considering that Denmark needs a large number of professionals in the construction of buildings from the UK and Ireland, the high employment rate and small-scale construction industry make the total cost of building a data center not better than London.
In Asia, it can be seen that Tokyo has clearly positioned itself as the most expensive location at a price of $9.3/watt - 10% higher than London. Given that the Japanese construction contracting market is relatively closed, the high profit margin of builders should be an important factor in Japan's high cost. Sydney's cost is second highest in the Asia Pacific region, with prices for materials and skilled labor being higher than those in the Asia Pacific region.
With the rapid development of China's data center market, Beijing and Shanghai have also been included in the survey. These two regions are nearly 40% cheaper than their sister city, Hong Kong (4.4 vs. US$7.1/W).
The construction cost of Beijing and Shanghai is converted into RMB (according to the assumption of 7), which is about 30 RMB/W. The construction cost per cabinet is approximately 120,000, which is basically the construction cost of the domestic Tier III data center.
India is still the cheapest market in the world. In line with the 2017 data, India's Chennai is the cheapest city in the surveyed area with a construction cost of US$3.8/W.
Turner & Townsend also published cost index comparisons for data center buildings around the world: Shanghai and Beijing can still rank among the world's most cost-competitive data center destinations. China has relatively competitive labor costs. Even in areas such as Beijing and Shanghai where domestic labor costs are high, it is still competitive compared to Hong Kong construction workers' daily wages of 1,500 yuan. China is also the origin of many data center electromechanical equipment, and it also makes local construction costs more competitive.
The domestic procurement mode with the lowest price and the lowest bid price can be regarded as the only one in the world, and the profits of domestic contractors are oppressed. This is also an important factor in the cost of construction of domestic data centers can be proud of the world. Now, the domestic data center industry needs more reflection, mainly because: this model continues, low profits will inevitably lead to low industry R&D investment and low technological innovation and accumulation, and ultimately whether the domestic data center industry will re-emphasize globally. In addition to cost, there is a lack of old ways of technical core competitiveness.