This report assesses the impacts of delays in data centre construction on operational financial metrics, budget and internal rate of return, and examines the role of effective reporting in ensuring on-time delivery.

The true cost of delays in data centre construction

Global data centre demand is surging, with capacity projected to grow at a 17% compound annual growth rate (CAGR) between 2025 and 2030, reaching 100 GW by 2030. Delivering this capacity is increasingly challenging due to rising construction complexity, supply chain disruptions and tightening regulatory frameworks. In this environment, preventing delays is critical to safeguarding financial returns on data centre projects, yet the growing scale and complexity of projects make on-time delivery harder than ever to achieve.

According to STL Partners’ research, for every month of delay in the completion of a data centre, the developer incurs USD14.2 million of lost revenue, cost overruns and contractual penalties. A three-month delay can result in an indicative internal rate of return (IRR) decrease from 17.1% to 12.6% across a ten-year timeframe. This is before factoring in indirect costs such as the strained stakeholder relationships and the reputational impacts.

The true cost of a one-month delay of an indicative data centre project

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Customers of data centre developers, particularly hyperscalers and other anchor tenants (e.g., large enterprises), operate on tight schedules. This means that any disruption in facility availability can push these customers towards competitors. At the same time, costs of capital, equipment and labour accumulate rapidly – intensifying the financial strain on developers from even minor delays while tying up teams needed for future projects. The result: delivery slippages that can severely erode internal rates of return, turning otherwise viable investments into marginal or unviable propositions.

Data centre delivery delays can decimate IRR

To address these challenges, data centre developers must:

• Plan for disruption: Use proactive scenario planning and strong governance to make the project plan as resilient as the site itself.
• Implement standardised, real-time reporting: Equip construction managers with live insights to address risks early. Integrated reporting enables timely escalation, reducing overruns and improving control.
• Proactively manage risks: Define and communicate a clear risk matrix, escalation path and retrospective process to enable rapid issue resolution and continuous process improvement.
• Deploy smarter tools: Adopt digital solutions, integrating advanced tech such as AI, and prioritise interoperability to enhance delivery efficiency.

Table of contents

• Foreword
  • Methodology
    • Interviewee profiles
  • Editorial independence
• The true cost of delays in data centre construction
• Counting the price of delay
  • Overall impact on IRR
  • Beyond the balance sheet: The indirect costs of data centre delays
• Success through control: How effective project management and reporting eliminate delays
• Core reporting challenges in data centre construction
  • Complex stakeholder management: The coordination bottleneck
  • The data integrity challenge: Inconsistent reporting and the burden of manual validation
  • The resource constraints challenge: Labour shortages and supply chain uncertainty
  • The regulatory and regional complexity challenge: Navigating compliance, certification and cultural barriers
• Optimising reporting and risk management: Best practices to prevent delays
  • Plan for disruption: Expect the unexpected
  • Standardise customisable governance: Create clear reporting and communication structures
  • Proactive risk management: Identify, track and mitigate early
  • Smarter tools: Use technology to enhance visibility and decision-making
• Conclusion

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Jonas Topp-Mugglestone

Jonas Topp-Mugglestone

Consultant

Jonas is a Consultant at STL Partners, specialising in data centres and M&A.