Artificial intelligence is driving considerable data center development cost increases in Asia Pacific, with some markets seeing rises of more than 15 percent, research from Cushman & Wakefield has found.

The real estate services firm’s report, Asia Pacific Data Centre Construction Cost Guide 2026, has revealed that sourcing strategies, labor costs, and supply chain constraints are key factors increasing costs, with widening cost differences between markets in the region.

Data center construction costs in APAC now range from the lowest recorded figure, $7.9 million per megawatt in Taiwan, to the highest, $19.2 million per megawatt in Japan. Singapore has the second-highest cost at $17.9 million per megawatt.

Cushman & Wakefield said this reflects development economics “no longer moving uniformly across the region, increasing the importance of precise market-level modeling, especially for large AI-optimized campuses.”

In primary markets, such as Tokyo, Singapore, Sydney, Taipei, and Johor, these cost increases are primarily driven by competition for accessible power and grid capacity constraints, which are resulting in long connection timelines. Meanwhile, added complexity in power, cooling, and structural systems is resulting in further complexity for future builds.

Cushman & Wakefield also pointed to procurement issues as causing “uneven cost outcomes,” with prices widening between Chinese and non-Chinese suppliers. Equipment lead times are also lengthening, and increased adoption of prefabs and modular data centers is adding further variability in prices.

According to the report, retrofits of legacy facilities for AI workloads are also struggling, with data center owners moving towards Edge computing, warm storage, and interconnection hubs.

“Across Asia Pacific, construction cost inflation diverges sharply, with some markets seeing increases above 15 percent while others remain below five percent,” said Andrew Green, head of Cushman & Wakefield's Asia Pacific data center group.

“A key reason for this split is that AI is reshaping the physical and technical requirements of data centers, particularly at the shell and core level. Higher power density, more complex cooling systems, and stronger structural requirements are becoming standard in AI‑ready facilities, with very different cost implications depending on local power availability, labor capacity, and delivery conditions.”

Pritesh Swamy, head of research and advisory for Cushman & Wakefield's Asia Pacific data center group, added: “As AI adoption accelerates, its influence on core design standards is becoming more pronounced. Facilities are increasingly planned around higher-density compute and advanced cooling approaches, setting a new baseline for next‑generation development.”

“AI is transforming data center design far faster than traditional development cycles anticipated. Each new generation of high‑performance hardware demands more power, more cooling, and greater structural resilience. These requirements are redefining what it means to build a future‑ready facility, and markets that can meet them effectively are pulling ahead while others face rising delivery and cost pressures.”

In another recent report, Cushman & Wakefield said that APAC’s data center development pipeline had hit a record 19.4GW in 2025, with further growth expected in 2026.