GCC Data Center Land Costs: Country Comparison
Explore the GCC data center landscape, comparing land and energy costs, connectivity, and government incentives across Saudi Arabia, UAE, and Qatar.
Looking to expand your data center operations in the GCC? Here's what you need to know:
The GCC data center market is booming, with a projected growth from USD 3.48 billion in 2024 to USD 9.49 billion by 2030. Key players like Saudi Arabia, the UAE, and Qatar are driving this expansion, each offering unique advantages in land costs, connectivity, and government incentives. Here's a quick breakdown:
- Saudi Arabia: Affordable industrial land (US$10–50/m²), low energy costs (US$0.05–0.06/kWh), and attractive incentives like 100% foreign ownership in the Cloud Computing Special Economic Zone.
- UAE: Advanced connectivity with 19 submarine cables, a skilled workforce, and strong government support, but higher land costs and energy constraints.
- Qatar: Exceptional 5G and fibre coverage, mobile speeds of 335 Mbps, and strategic positioning, though limited land availability drives up costs for prime locations.
Quick Comparison
| Country | Land Costs | Energy Costs | Key Advantages | Challenges |
|---|---|---|---|---|
| Saudi Arabia | US$10–50/m² | US$0.05–0.06/kWh | Affordable land, growing market, strong incentives | Evolving regulations, longer approval times |
| UAE | Higher than Saudi Arabia | US$0.05–0.06/kWh | Advanced connectivity, skilled workforce | Expensive land, energy constraints |
| Qatar | Limited data available | Competitive rates | Exceptional 5G/fibre, strategic location | Limited land, high costs for prime sites |
The GCC's data center capacity is expected to triple by 2030, making it a prime region for investment. Choose Saudi Arabia for cost efficiency, the UAE for a mature ecosystem, or Qatar for latency-sensitive operations. With the right strategy, the GCC offers unmatched opportunities for growth.
GCC Data Centres Projects Market 2025 | MEED Webinar
1. UAE
The UAE stands out in the region thanks to its strategic connectivity, supportive government policies, and competitive energy prices. It has established itself as a leader in the data centre market, with Dubai accounting for about 60% of the country's data centre capacity and Abu Dhabi following with around 30%. This concentration highlights the UAE's advanced infrastructure and the strong demand from enterprises.
Land Costs
Construction costs in the UAE have seen a modest rise, now standing at US$8.80 per watt, up from US$8.35, placing the country 44th globally. Although specific data on industrial land prices in the UAE is less frequently disclosed, they are generally higher compared to Saudi Arabia's range of US$10–50 per square metre. Dubai's position as a finance and tech hub naturally drives up land values, while Abu Dhabi offers more cost-effective options for large-scale projects. These pricing dynamics are further enhanced by the UAE's excellent connectivity.
Connectivity and Location
The UAE's position as a global data hub significantly boosts the value of its land for data centres. The country is connected by 19 submarine cables, with Fujairah playing a pivotal role as the landing point for 13 of these subsea cables. This extensive network ensures fast international connections, making premium zones highly attractive for data centre operators. The UAE's Internet Data Centre market is projected to reach US$542.76 million by 2032, growing at an annual rate of 10.46% during the forecast period. This unparalleled connectivity continues to make the UAE a hotspot for data centre investments.
Government Incentives
Recognising the importance of data centres, the UAE government has classified them as Critical National Infrastructure (CNI), ensuring strategic land allocation and development. Through the UAE Digital Economy Strategy, the government aims to double the digital economy's contribution to GDP in the next decade, supported by over 30 initiatives and programmes. Investor-friendly tax and regulatory policies have already attracted significant investments, including US$1.2 billion in projects and a pipeline worth US$433 million. Combined with competitive energy costs, these initiatives create a highly appealing environment for data centre growth.
Energy Costs
Electricity costs in the UAE range between US$0.05 and US$0.06 per kilowatt-hour, giving the region a competitive advantage. Additionally, the government's focus on sustainability is driving the development of greener, energy-efficient facilities, further increasing the UAE's attractiveness for data centre investments.
2. Saudi Arabia
Saudi Arabia has emerged as a major player in the GCC data centre market, largely driven by its Vision 2030 initiative, which aims to attract global operators. This push has led to advantages in areas like cost efficiency, connectivity, and supportive policies.
Land Costs
Industrial land in Saudi Arabia is priced between US$10 and US$50 per square metre, significantly lower than global benchmarks such as Northern Virginia, where costs range from US$150 to US$600 per square metre. With vast land reserves, the Kingdom provides ample space for hyperscale facilities, making it ideal for large-scale projects and campus-style developments that require room for phased expansions.
Connectivity and Location
Saudi Arabia's strategic position at the intersection of major trade routes gives it a natural edge in connectivity. Investments in submarine cables and inland infrastructure have further solidified its role as a regional digital hub. Riyadh, in particular, is witnessing rapid growth in its data centre footprint, with JLL forecasting a 37% compound annual growth rate (CAGR) through 2027. This growth is supported by substantial cloud provider investments, including Microsoft, which completed the construction of its data centre region in December 2024. The facility, featuring three availability zones, is set to launch in 2026. Additionally, Saudi Arabia accounted for over 22.3% of the total power capacity added by data centre operators across the Middle East in 2024.
Government Incentives
To attract international operators, the Saudi government has rolled out a range of incentives. The Cloud Computing Special Economic Zone (CCSEZ), introduced in 2023, offers perks like 100% foreign ownership, subsidised utilities, tax breaks, and simplified licensing processes through the Ministry of Investment. Operators in the ICT and digital economy sectors also benefit from reduced corporate income tax rates and customs duty exemptions. The CCSEZ is expected to contribute to 30% of the Kingdom's ICT spending by 2030. Beyond this, ambitious projects like Humain, with a planned capacity of 6.6GW by 2034 and a US$77 billion investment, underline the Kingdom's commitment to the sector. The data centre market in Saudi Arabia is projected to reach US$3.9 billion by 2030.
Energy Costs
As a leading energy producer, Saudi Arabia offers competitive electricity tariffs, further enhancing its appeal for data centre operators. These low energy costs allow operators to maintain efficient operations while ensuring high reliability, making the Kingdom an attractive destination for data centre investments.
"With the leadership's commitment to innovation and substantial investments in technology, a favourable regulatory climate and significant cost advantage, Saudi Arabia is poised to become a leading player on the global data center stage and the transformative hub for the region's digital economy." - Jawad Shaikh, Partner, Riyadh Office, Middle East
3. Qatar
Qatar's compact size and strategic location have shaped a distinct data centre market, setting it apart from its larger GCC neighbours. The nation's ambition to become a regional digital hub has driven focused investments in infrastructure and connectivity.
Land Costs
Unlike Saudi Arabia, where land prices range from US$10–50 per square metre, Qatar provides limited data on land costs. However, its small geographical size makes prime real estate near Doha a premium commodity. With limited availability of such locations, operators must carefully weigh costs against the benefits of proximity to the capital’s business district and existing infrastructure. This scarcity forces prioritisation of accessibility and connectivity when selecting sites.
Connectivity and Location
Qatar's location at the crossroads of Europe, Asia, and Africa gives it direct access to global markets and makes it an efficient hub for business operations. The country leads the world in mobile internet speeds, averaging nearly 335 Mbps, and boasts 100% coverage with both 5G and fibre networks. Internet penetration reached approximately 98% in 2024, while mobile connectivity remains robust, with 4.89 million mobile phone connections recorded at the start of 2023 - equivalent to over 180% of the country’s population.
"Situated at the crossroads of Europe, Asia and Africa, Qatar is perfectly positioned to act as a hub for data traffic between these regions."
This strategic positioning significantly reduces latency for businesses serving customers across continents, strengthening Qatar's status as a regional digital hub. Such impressive connectivity metrics highlight the country's growing appeal as a competitive destination for data centres.
Government Incentives
In May 2025, Invest Qatar introduced a US$1 billion incentive programme, offering up to 40% support for eligible local investment expenses over five years, with a minimum threshold of QR25 million. This initiative has already attracted US$2.74 billion in foreign direct investment (FDI) across 241 projects, creating 9,348 jobs in 2024.
H.E. Sheikh Faisal bin Thani bin Faisal Al Thani reiterated Qatar’s dedication to sustainable growth and strategic investments as part of its Third National Development Strategy.
In addition to financial incentives, the government has implemented tax benefits and simplified business processes, making it easier for companies to establish and expand data centre operations.
Pros and Cons
Each GCC country brings its own set of strengths and challenges when it comes to investing in data centre land. Evaluating these trade-offs is essential for operators aiming to make informed decisions about where to establish their facilities.
This comparative overview expands on the earlier country profiles, offering insights into how factors like cost, connectivity, and regulations influence site selection.
Saudi Arabia stands out for its affordable land costs, with industrial plots priced between US$10–50 per square metre. This affordability, combined with initiatives like the Cloud Computing Special Economic Zone launched in 2023 and plans to add nearly 650 MW of power capacity by the end of 2025, makes it an attractive option for large-scale projects. However, operators may encounter challenges such as a still-developing regulatory framework and longer approval processes.
The UAE boasts the region's most advanced data centre ecosystem, supported by 19 submarine cables that deliver strong international connectivity. Cities like Dubai and Abu Dhabi benefit from established infrastructure and a skilled workforce. However, these advantages come at a cost - land and energy constraints have driven up acquisition prices, making the UAE a more expensive option compared to its neighbours.
Qatar offers unique opportunities with its compact geography and exceptional connectivity. The country features 100% 5G and fibre coverage, and mobile internet speeds average an impressive 335 Mbps, making it ideal for latency-sensitive applications. On the downside, limited land availability leads to fewer site options and increased competition for prime locations.
| Country | Advantages | Disadvantages |
|---|---|---|
| UAE | • 19 submarine cables ensuring strong connectivity • Advanced business infrastructure • Skilled workforce • Well-established regulatory environment |
• Higher land acquisition costs • Energy supply constraints • Premium pricing for prime locations |
| Saudi Arabia | • Affordable land costs (US$10–50/m²) • Incentives from the Cloud Computing Special Economic Zone • Planned power capacity expansion • Growing domestic demand |
• Evolving regulatory framework • Longer approval timelines • Less mature operator ecosystem |
| Qatar | • Advanced connectivity with 335 Mbps mobile speeds • Full 5G and fibre coverage • Strategic regional positioning |
• Limited land availability • High costs for prime urban sites • Smaller domestic market |
Competitive electricity tariffs of US$0.05–0.06/kWh in both the UAE and Saudi Arabia further enhance the region's attractiveness for data centre investments.
Operators need to weigh their priorities carefully. Saudi Arabia's low land costs make it a great choice for hyperscale deployments, while Qatar's cutting-edge connectivity is ideal for latency-sensitive operations. On the other hand, the UAE offers a mature and predictable ecosystem, albeit at a higher price point.
The best option ultimately depends on the project's goals: whether it's cost efficiency, connectivity, or operational stability, the GCC offers a range of strategic choices for data centre development.
Conclusion
The GCC is quickly establishing itself as a major player in the global data centre industry, offering plenty of opportunities for investors and operators looking to expand efficiently. The region's data centre capacity is forecasted to grow from 1GW in 2025 to 3.3GW within the following five years, creating a dynamic landscape for growth and innovation.
Saudi Arabia emerges as a prime destination for cost-conscious operators, thanks to its affordable land prices and proactive government initiatives like the Cloud Computing Special Economic Zone. The country also dominates the regional market, accounting for nearly 75% of the GCC’s upcoming data centre power capacity.
Investment in the GCC data centre sector is surging, with an estimated US$8 billion expected to fund new projects by 2027. Sustainability is a key driver, with projects like the UAE’s Masdar facility targeting 1GW by 2027 and ACWA Power’s solar energy portfolio exceeding 12GW.
For hyperscale operators focused on cost efficiency, Saudi Arabia offers a compelling advantage with electricity tariffs as low as US$0.05–0.06 per kWh. Meanwhile, the UAE provides a well-established regulatory framework and a mature ecosystem, ideal for operators with specific infrastructure needs. Emerging markets like Qatar also present additional opportunities, supported by streamlined planning processes and proactive government policies that cut through bureaucracy, reduce costs, and accelerate project timelines.
Success in the GCC data centre market depends on aligning project goals with each country’s particular strengths. With the green data centre market expected to reach approximately US$9.21 billion by 2032, sustainability is no longer optional - it’s a cornerstone for securing long-term contracts. By tailoring investments to these unique national advantages, operators can fully leverage the potential of the GCC’s thriving data centre industry.
FAQs
What factors should I consider when investing in data centres in Saudi Arabia, the UAE, or Qatar?
When looking at data centre investments in Saudi Arabia, the UAE, or Qatar, there are a few critical aspects to consider:
- Energy costs and availability: Thanks to the region's rich energy resources, powering large-scale facilities becomes more feasible and cost-effective.
- Location and connectivity: Strategic placement ensures excellent access to both regional and global networks, making it a vital factor for investors.
- Regulatory environment: Local data sovereignty laws and initiatives like Saudi Arabia's Vision 2030 or the UAE's focus on growing its IT sector play a significant role in shaping decisions.
The growing demand for cloud computing and AI technologies further fuels the market's potential. While Saudi Arabia is currently leading in IT infrastructure development, the UAE and Qatar are also gaining traction with forward-thinking and sustainable data centre projects.
What role do government incentives play in shaping data center investments across the GCC region?
Government Incentives Driving Data Centre Investment in the GCC
In the GCC region, government incentives play a crucial role in drawing data centre investments. These incentives typically include tax breaks, financial subsidies for large-scale ventures, and backing for digital transformation projects. Such initiatives not only help reduce operational costs but also allow operators to navigate potential risks with greater ease.
By supporting advancements in technologies like AI and smart city infrastructure, GCC nations aim to establish themselves as a leading hub for digital infrastructure. This forward-thinking strategy has made countries like the UAE, Saudi Arabia, and Qatar increasingly appealing to data centre operators looking to expand in the Middle East.
How does connectivity influence the competitiveness of data center markets in the UAE, Qatar, and Saudi Arabia?
Connectivity and Its Role in Data Center Growth
Connectivity plays a key role in determining the competitiveness of data center markets in the UAE, Qatar, and Saudi Arabia. Both the UAE and Qatar boast advanced network infrastructure and strategic locations along major subsea cable routes. These factors enable low-latency, high-speed data transfer, which is essential for supporting technologies like AI, IoT, and other digital services. This level of connectivity has made these countries attractive to global investors and businesses looking for reliable and efficient data solutions.
Saudi Arabia, on the other hand, is making strides in building its connectivity infrastructure. However, it still lags behind the UAE and Qatar in terms of international bandwidth and network reliability. The established connectivity advantages of the UAE and Qatar have turned them into regional hubs for data center development, offering faster and more dependable services to international clients.