Building a data centre in Milan costs 11 per cent less than the European average

Broadening our perspective from Italia to the global data centre landscape, the transformation currently underway involves a significant phase of geographical repositioning of infrastructure and investment. According to the report by Turner & Townsend (a professional services firm with over 22,000 professionals worldwide), the sector is considered ‘recession-proof’ by 73 per cent of industry experts, and capital from major funds and hyperscalers is diversifying, moving away from the traditional markets of Northern Europe, the so-called FLAP-D (Frankfurt, London, Amsterdam, Paris and Dublin), to build new capacity in Southern Europe.

The reason? Market saturation in certain sectors and artificial intelligence, due to the rise in construction costs resulting from its introduction into these infrastructures. In fact, new high-density data centres impose a so-called ‘AI Premium’ (the surcharge generated by the advanced cooling infrastructure required) of 7–10 per cent on total costs compared with traditional facilities. “AI is reshaping Capex,” explains Carlo Matildi, managing director for Italia at the British multinational. “The established data centre markets are becoming increasingly saturated, and Italia is reaping the benefits, with Milan attracting global capital thanks to the scalability that other Flap-D cities struggle to guarantee”. Furthermore, building in Milan currently costs an average of $9.79 per watt. This figure is 11 per cent lower than the European average and competitive on an international scale. According to Turner & Townsend, costs are in fact 19 per cent lower than London’s $12.02 per watt and 15 per cent lower than Frankfurt’s $11.60 per watt, with even greater savings compared to the costs recorded in Zurich ($14.24 per watt) or Tokyo, where costs reach $15.15 per watt.

Despite Italia’s strong appeal, however, challenges remain. According to the data, 48 per cent of developers identify delays in connecting to the network as the main risk factor, whilst 83 per cent express concern about the local supply chain’s inability to provide advanced components for AI data centres. “To build the hyperscale mega-campuses of up to 192 MW that we manage in Italia,” concludes Matildi, “the local market is struggling to source critical materials such as transformers and advanced cooling systems.” The regulatory challenge is therefore compounded by another: the industrial one.