Middle East Data Center Construction Market is Set to Double to $4.39 Billion by 2029

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Middle East Data Center Construction Market is Set to Double to $4.39 Billion by 2029

by Umme Aimon Shabbir

Published 20 Jun 2024

A new report by Research and Markets provides an in-depth analysis that predicts a bright future for data center construction in the Middle East.

According to the “Middle East Data Center Construction Industry: Outlook & Forecast 2024-2029” report, in 2023 the industry was valued at USD 2.35 billion, but it’s on a trajectory. Due to an annual growth rate of 10.98%, it’s projected to almost double, reaching an estimated USD 4.39 billion by 2029.

The market is categorized into three primary segments: electrical infrastructure, mechanical infrastructure, and general construction, all of which are closely linked and mutually dependent. Given the challenging climatic conditions in the Middle East, cooling systems and methodologies are essential in this sector.

Keeping data centers running smoothly requires power backups like UPS and generators, and sustainable energy sources such as natural gas and biofuel. Tight security and fire safety measures are also crucial.

Middle East Construction Industry Significant Trends

The report delves into the latest trends transforming the construction market, from innovative building techniques and sustainable materials to digitalization and the increasing focus on green construction.

Growth in Green Initiatives

The Middle East is steering towards sustainability, aiming for an environmentally sustainable future. Nations such as the UAE, Saudi Arabia, Israel, Kuwait, and Oman are transitioning towards renewable energy sources like solar, wind, and bioenergy to meet their power requirements. Efforts to reduce water use by adopting air-based cooling techniques are also gaining traction. Notably, the UAE’s Moro Hub has initiated the largest solar-powered data center in Dubai, and Equinix’s DX3 facility in Dubai is reportedly fully powered by renewable energy.

Artificial Intelligence Integration

Artificial Intelligence (AI) is reshaping global industries, with the Middle East actively participating in this technological revolution. Various countries in the region have established AI committees and launched national AI strategies to foster development and enhance workforce skills. Data centers are central to AI advancements, offering high-performance computing (HPC), data storage, and specialized hardware hosting. The UAE and Saudi Arabia are at the forefront of utilizing AI for power grid management and optimization.

Smart City Development

The UAE and Saudi Arabia are pioneers in developing smart cities within the Middle East. Dubai and Abu Dhabi are ranked among the top smart cities globally. The ambitious NEOM project in Saudi Arabia, with an estimated cost of USD 500 billion, is poised to be a global benchmark for smart cities upon its completion in 2025.

Key Players in the Middle East’s Construction Market

Key construction contractors in the Middle East data center construction market include AECOM, ENMAR Engineering, Anel Group, McLaren Construction Group, HHM Building Contracting, and Turner & Townsend. Datacenter investors feature prominent companies such as Gulf Data Hub, Equinix, and Khazna Data Centers, with newcomers like Digital Realty and Compass Datacenters poised to disrupt the market.

Prominent support infrastructure vendors operating in the region include ABB, Alfa Laval, Eaton, Johnson Controls, Schneider Electric, Siemens, and Vertiv. These vendors showcase a strong global footprint and compete with local vendors through direct operations and partnerships.

Umme Aimon Shabbir

Editor at First Bit

Aimon brings a deep understanding of the modern construction business to her articles. Her strength is providing practical content that enhances users’ understanding and usage of the software in the industry. As an editor, Aimon helps our authors reach their full potential and produce their best work.

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