The Middle East data centre construction market is set for remarkable growth, fueled by the increasing adoption of artificial intelligence (AI), smart city developments, and a strong emphasis on sustainability, according to a recent report.
Valued at $2.35 billion in 2023, the market is projected to reach $4.39 billion by 2029, reflecting a compound annual growth rate (CAGR) of 10.98%, as highlighted in the ‘Middle East Data Center Construction Industry – Outlook & Forecast 2024-2029’ report by Research and Markets.
Key Trends Shaping the Market
The Middle East is prioritizing sustainable practices to ensure a greener future. Countries like the UAE, Saudi Arabia, Kuwait, and Oman are integrating renewable energy sources, including solar, wind, and bioenergy, to power data centres. Innovative cooling techniques, such as air-based systems, are being adopted to reduce water consumption. Notably, the UAE's Moro Hub launched the largest solar-powered data centre in Dubai, and Equinix's DX3 facility in Dubai operates entirely on renewable energy.
AI adoption is driving the demand for high-performance computing (HPC), data storage, and specialized hardware. The UAE and Saudi Arabia are at the forefront, leveraging AI for smart grid management and energy optimization, enhancing the efficiency of power generation and supply.
The development of smart cities, such as Dubai and Abu Dhabi, is creating a significant need for robust data centre infrastructure. Saudi Arabia’s Neom project, a highly anticipated smart city with an estimated cost of $500 billion, is expected to revolutionize the industry once operational.
Market Segmentation and Infrastructure Needs
The market is divided into electrical infrastructure, mechanical infrastructure, and general construction, all of which are interdependent. Due to the region's hot climate, cooling systems are essential. Data centres require efficient cooling solutions to manage the heat generated by servers and computing devices. Sustainable power backup solutions using EcoDiesel, natural gas, or biofuels are also gaining popularity to ensure uninterrupted operations.
Additionally, data centres need robust physical security and fire safety systems to safeguard against both external and internal threats.
Regional Leaders and Emerging Players
The UAE and Saudi Arabia lead the market with advanced technology, robust safety systems, and significant market shares. However, Kuwait, Qatar, and Bahrain are emerging as key players with ongoing developments.
Investment Opportunities
The Middle East data centre construction market offers lucrative opportunities, driven by advancements in AI, smart city initiatives, and a growing focus on sustainability. The region’s strategic location and supportive government initiatives further enhance its attractiveness to investors.
As the market continues to evolve, the Middle East stands poised to become a global hub for data centre innovation and sustainability.
News Source: Gulf Construction
