Planning to build an AI data center in Hyderabad? You’re making the right choice. Hyderabad is quickly becoming India’s AI capital, with mega-projects like NTT DATA’s ₹10,500 crore AI data center cluster and Google’s massive investments flooding the city. But before you break ground, let’s talk about the most critical decision: data center construction cost per square foot and whether you should use traditional construction or Pre-Engineered Buildings (PEB).
The honest truth? You could save ₹3,000-5,000 per square foot by choosing PEB over traditional RCC construction. That’s not small change—on a 50,000 sq ft data center, you’re looking at ₹1.5-2.5 crore in savings. Plus, you’ll finish construction 40-50% faster, meaning your facility generates revenue sooner.
Let me break down everything you need to know about data center construction cost per square foot in Hyderabad, the Telangana government subsidies you can tap into, and why PEB technology is revolutionizing how data centers are built in India’s AI hub.
What Exactly Is Data Center Construction Cost Per Square Foot?
When developers talk about data center construction cost per square foot, they’re referring to the total building expense divided by the total usable area. But here’s the thing—data centers aren’t your typical warehouse buildings. They’re specialized facilities designed to house servers, cooling systems, power infrastructure, and security equipment.
In Hyderabad right now, data center construction cost per square foot ranges from ₹14,000 to ₹24,000, depending on whether you’re building a Tier III or Tier IV facility. This is different from a regular warehouse (which costs ₹1,500-2,000/sq ft) because data centers demand precision, redundancy, and cutting-edge infrastructure.
Here’s the breakdown: When you’re looking at data center construction cost per square foot, you’re not just paying for walls and a roof. You’re paying for raised floors (to run cooling pipes underneath), reinforced structural supports for heavy server loads, precision power distribution systems, fire suppression infrastructure, and climate control capabilities. That’s why the costs are higher, but it’s also why choosing the right construction method matters so much.
Data Center Construction Cost Per Square Foot: PEB vs Traditional Construction
Let me show you why data center construction cost per square foot using PEB technology has become the preferred approach among investors and operators in Hyderabad:
Traditional RCC Construction
- Cost per square foot: ₹18,000-24,000
- Construction time: 12-18 months
- Maintenance: ₹200-300/sq ft annually
- Structural limitations: Hard to expand or modify later
PEB Construction
- Cost per square foot: ₹14,000-19,000
- Construction time: 6-9 months
- Maintenance: ₹100-150/sq ft annually
- Structural flexibility: Easy to scale and modify
The math is simple. For a 50,000 sq ft facility, PEB saves you ₹2-2.5 crore upfront, plus another ₹2-3 crore over the facility’s 25-year lifespan in maintenance costs. That’s a ₹4-5 crore advantage. And since data centers start generating revenue as soon as they’re operational, finishing 6-9 months faster means you’re also earning an extra ₹10-20 crore in revenue before your competitor even opens their doors.
Hyderabad data center developers are catching on. With NTT DATA, STT GDC, and AWS all racing to build capacity, every month of construction time saved matters. That’s why PEB data center construction has become the standard for serious operators.
Breaking Down Data Center Construction Cost Per Square Foot in Hyderabad
Ready for some specifics? Here’s what you’re actually paying for when you invest in data center construction cost per square foot in Hyderabad:
Core Building Structure (40-45% of cost)
- PEB steel frame: ₹5,500-7,500/sq ft
- Roofing & insulation: ₹2,000-3,000/sq ft
- Wall cladding: ₹1,500-2,500/sq ft
- Subtotal: ₹9,000-13,000/sq ft
Specialized Data Center Infrastructure (35-40% of cost)
- Raised flooring system: ₹1,500-2,500/sq ft
- Ceiling systems: ₹800-1,200/sq ft
- Cable trays & management: ₹600-1,000/sq ft
- Subtotal: ₹2,900-4,700/sq ft
Mechanical Systems (10-15% of cost)
- CRAC/CRAH cooling units integration: ₹1,000-1,500/sq ft
- Fire suppression system: ₹500-800/sq ft
- Subtotal: ₹1,500-2,300/sq ft
Electrical Infrastructure (8-12% of cost)
- PDU systems & cable routing: ₹800-1,200/sq ft
- UPS foundation & integration: ₹400-600/sq ft
- Subtotal: ₹1,200-1,800/sq ft
Total PEB Data Center Construction Cost Per Square Foot: ₹14,600-22,600
Hyderabad-Specific Data Center Construction Cost Per Square Foot
Location matters. A lot. You’ll pay different rates depending on where in Hyderabad you build:
Hitech City / Madhapur (Premium Tier I Area)
- Data center construction cost per sq ft: ₹18,000-24,000
- Why: Established fiber optic connectivity, proximity to IT companies, premium land
- Best for: Colocation facilities, enterprise data centers
- Real projects here: STT GDC, CtrlS, Sify, Microsoft
Nanakramguda / Financial District (Secondary Tier II Area)
- Data center construction cost per sq ft: ₹15,000-20,000
- Why: Good connectivity, slightly lower land costs, growing hub
- Best for: Mid-tier colocation, regional data centers
- Real projects: CtrlS Financial District facility
TSIIC Industrial Areas (Development Tier III Area)
- Data center construction cost per sq ft: ₹12,000-17,000
- Why: Subsidized land rates, government support, emerging connectivity
- Best for: New hyperscaler facilities, captive data centers
- Real projects: NTT DATA’s upcoming AI data center cluster
Kandukur / Shamshabad (Emerging Tier IV Area)
- Data center construction cost per sq ft: ₹10,000-15,000
- Why: Lower land costs, access to power, upcoming infrastructure
- Best for: Massive hyperscale facilities, government data centers
- Real projects: AWS facilities, upcoming Google infrastructure
Pro tip: The cheapest location isn’t always the best. You’re paying premium prices in Hitech City because of the connectivity infrastructure that’s already there. Moving to TSIIC industrial areas can save you money on construction, but you might need to invest in fiber connectivity separately.
Why PEB Technology Reduces Data Center Construction Cost Per Square Foot
PEB isn’t just cheaper—it’s smarter for data center construction. Here’s why:
1. Factory-Built Precision
With traditional RCC, you’re relying on on-site construction quality. With PEB, your steel structure is built in a factory under controlled conditions. For data centers, this precision matters because you need exact specifications for cooling, cable management, and server weight distribution. Kishore Infratech’s advanced machines (CNC plasma cutters, beam processing automation, precision welding systems) ensure every component fits perfectly. That reduces on-site rework by 30-40%, saving both time and money.
2. Modular Design for Future Scaling
A 50,000 sq ft data center today might need to become 75,000 sq ft in three years as demand grows. With RCC construction, expansion is messy and expensive. With PEB, you simply add more modular bays. This flexibility directly reduces your data center construction cost per square foot because you’re not over-building today for tomorrow’s needs.
3. Integrated Systems Support
PEB structures are designed to support heavy mechanical systems (cooling, generators, UPS). The raised floor systems, cable management infrastructure, and load-bearing requirements are all integrated into the design phase. Traditional construction often requires reinforcement after the fact, which costs more and delays timelines.
4. Faster Construction = Faster Revenue
Here’s the financial reality: A 50,000 sq ft data center generates ₹2-5 crore in annual revenue once it’s operational. If PEB construction gets you to market 6 months faster than traditional RCC, you’re not just saving on construction costs—you’re gaining an extra ₹1-2.5 crore in revenue. That’s the real win.
Telangana Government Subsidies Reducing Your Data Center Construction Cost Per Square Foot
Telangana isn’t sitting on the sidelines. The state government has rolled out aggressive incentives to make Hyderabad India’s data center capital:
TS-iPASS Benefits
- 50% of eligible land cost subsidy through TSIIC industrial areas
- Stamp duty waiver on all land transactions
- Capital investment subsidy: 15-25% depending on location
- Effect on data center construction cost per sq ft: Reduces effective cost by ₹2,000-4,000/sq ft
Telangana Data Center Policy Incentives
- Power tariff subsidy: ₹2-4/unit for first 5 years
- Building approval fee rebates: Up to 50% on municipal fees
- Land at concessional rates in TSIIC designated data center parks
- Dual power grid guarantee for uninterrupted electricity
Infrastructure Status Benefits
- Access to long-term financing at 2-3% lower interest rates
- Collateral-free loans up to 80% of project cost
- Tax incentives for equipment and machinery imports
Real example: A 50,000 sq ft facility with ₹8 crore base construction cost could receive ₹1.5-2 crore in subsidies and tax benefits, effectively reducing data center construction cost per square foot from ₹16,000 to ₹13,000.
Real Hyderabad Data Center Projects Using Modern PEB-Like Construction
Let’s look at what’s happening on the ground:
NTT DATA’s ₹10,500 Crore AI Data Center Cluster
- Location: Hyderabad outskirts
- Capacity: 400 MW (25,000 GPUs)
- Timeline: 2025-2030
- Why it matters: NTT chose Hyderabad specifically for its infrastructure and policy support. The modular design philosophy aligns perfectly with PEB capabilities—they’ll be adding capacity in phases over several years.
STT GDC’s 100 MW Campus
- Location: Hyderabad expansion
- Capacity: 100 MW
- Technology: AI-ready infrastructure with liquid immersion cooling
- Partnership: Neysa Networks for AI acceleration platform
- PEB advantage: Modular design allows them to respond to rapidly changing AI demand
CtrlS Datacenters Tier IV Facility
- Location: Nanakramguda, Financial District
- Scale: 120,000+ sq ft
- Capability: Tier IV redundancy with 99.99% uptime SLA
- Why they built it: Precision construction requirements favored modern building methods
FAQ: Data Center Construction Cost Per Square Foot in Hyderabad
Q1: What’s the typical timeline for data center construction cost breakdown?
A: With PEB construction, you’re looking at 3-4 weeks for design approval, 2-3 weeks for foundation work, 6-8 weeks for structure assembly, and 3-4 weeks for MEP (mechanical, electrical, plumbing) systems and commissioning. Total: 6-9 months. Traditional RCC typically takes 12-18 months.
Q2: Why is data center construction cost per square foot so much higher than warehouse construction?
A: Simple answer: data centers are precision facilities. You’re not just storing goods; you’re housing mission-critical equipment that processes trillions of rupees in financial transactions daily. That demands redundant cooling systems, specialized power distribution, seismic resilience, and precision climate control. A warehouse just needs roof and walls.
Q3: Can I reduce data center construction cost per square foot by choosing a lower tier facility?
A: Yes and no. Tier I facilities (99.67% uptime) cost less than Tier IV (99.99% uptime). But here’s the catch: the cost difference is only 10-15%, while the performance difference commands 30-50% higher rental rates. So you’re actually making LESS money per square foot by going cheaper. Most investors in Hyderabad are choosing Tier III/IV because the ROI is better despite higher initial costs.
Q4: Should I get multiple quotes before deciding on PEB for my data center?
A: Absolutely. Data center construction cost per square foot varies based on your specific requirements—the cooling system you choose, the redundancy level you need, the fiber connectivity required. Get quotes from at least 3 PEB manufacturers. For Hyderabad projects, we recommend Kishore Infratech (they understand regional subsidies), Interarch, and Steelbuild.
Q5: How do I factor in land costs when calculating total project investment?
A: Land is typically 20-30% of your total data center investment. Hyderabad land currently costs ₹2,000-5,000/sq ft depending on location. So a 50,000 sq ft facility on 2 acres (roughly 87,000 sq ft) could cost ₹1.5-4 crore just for land. Add your construction cost and MEP systems, and you’re looking at ₹5-12 crore total. Telangana subsidies can cover 20-30% of this.
Q6: What’s the difference between data center construction cost per square foot in Hyderabad vs Mumbai?
A: Mumbai costs 15-20% more because land is scarcer and connectivity infrastructure is more mature (driving up prices). Bangalore costs about the same as Hyderabad now. That’s why companies like NTT and STT are choosing Hyderabad—you get similar infrastructure at 20% lower costs, plus government subsidies.
Q7: Can I build a data center in phases to reduce upfront data center construction cost per square foot?
A: Yes! And PEB is perfect for this. Build your core 20,000 sq ft facility first, prove the economics, then expand 10,000 sq ft at a time. Each phase costs the same per square foot because PEB uses standardized components. You reduce your financial risk while scaling up revenue in parallel.
Q8: What’s the ROI timeline for a Hyderabad data center?
A: Tier III colocation facilities in Hyderabad typically achieve 5-7 year ROI at 70% utilization. Hyperscale captive facilities (like hyperscalers building for themselves) achieve ROI in 4-5 years at higher utilization. Government incentives can improve these numbers by 1-2 years.
Q9: Do I need special insurance for data center construction cost coverage?
A: Yes. Contractors’ All Risks (CAR) insurance is mandatory during construction. Many projects also get Erection All Risks (EAR) insurance for specialized MEP systems. Budget 1-2% of construction cost for insurance. Telangana’s infrastructure status designation often qualifies you for better insurance rates.
Q10: How do government subsidies affect my data center construction cost per square foot?
A: Government subsidies typically reduce effective cost by 20-30% through: land cost reimbursement (₹2,000-3,000/sq ft), capital investment subsidy (₹2,000-4,000/sq ft), and tax benefits (₹1,000-2,000/sq ft). So your effective data center construction cost per square foot might drop from ₹18,000 to ₹13,000.
Cost Comparison: Data Center Construction Cost Per Square Foot Across India’s Top Hubs
If you’re deciding between locations:
- Mumbai: ₹18,000-25,000/sq ft (premium connectivity, high land costs)
- Bangalore: ₹16,000-22,000/sq ft (established hub, competitive rates)
- Hyderabad: ₹14,000-20,000/sq ft (emerging hub, government support, lower land costs)
- Delhi-NCR: ₹15,000-21,000/sq ft (good connectivity, variable land costs)
- Chennai: ₹12,000-18,000/sq ft (upcoming hub, land advantages)
The Hyderabad advantage? You get Mumbai-level connectivity infrastructure at Bangalore-level pricing, PLUS government subsidies that Mumbai and Bangalore don’t offer. That’s why NTT, STT, and Google are all choosing Hyderabad.
The Bottom Line: Data Center Construction Cost Per Square Foot in Hyderabad with PEB
Building an AI data center in Hyderabad makes financial sense right now. You’re looking at:
- ₹14,000-20,000/sq ft construction cost (PEB method)
- 6-9 month construction timeline (vs 12-18 months traditional)
- ₹2-4 crore in government subsidies (for a 50,000 sq ft facility)
- Strong ROI timeline (4-7 years depending on type)
- Massive long-term opportunity (Hyderabad is becoming India’s AI hub)
The biggest decision you’ll make isn’t where to build or how big to build—it’s choosing the right construction partner. A PEB specialist who understands Hyderabad’s infrastructure, government policies, and data center requirements will save you more money than you’ll make back by shopping around for cheap labor.
That’s why companies like NTT, STT, and CtrlS choose experienced PEB partners for their Hyderabad facilities. They know that data center construction cost per square foot isn’t just about the number on the quote—it’s about speed, quality, reliability, and the ability to scale.
If you’re serious about building an AI data center in Hyderabad, start by understanding your exact requirements and getting multiple quotes specifically based on your data center construction cost per square foot calculations. Then factor in Telangana’s subsidies, and you’ll have a real picture of your investment.
Hyderabad’s AI infrastructure boom is just getting started. Now is the time to build.