Article | Intelligent Investment

Business Insights | What will power Australia’s data centre ambitions?

AI is accelerating Australia’s data centre growth, but access to power and the ability to turn ambitious plans into operational assets are becoming increasingly important.

November 11, 2026

Two male IT technicians stand in a server room, reviewing diagnostics on a tablet while working in front of a wall of rack-mounted server cabinets.

Australia Data Centres The Next Phase of Growth

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Australia’s data centre sector is entering a new phase of growth. 

Cloud adoption, digitalisation and the expansion of major technology platforms have underpinned the sector for years. Now, the rapid rise of artificial intelligence is adding another layer of demand and changing what is required from the infrastructure supporting it. 

AI-related workloads are expected to account for 29% of global data centre workloads by 2030, up from 13% in 2025 and less than 3% prior to 2023. AI also requires significantly more computing power than many traditional workloads, bringing greater requirements for electricity, cooling and supporting infrastructure. 

For Australia, already one of Asia Pacific’s established data centre markets, this presents a significant growth opportunity. But as the development pipeline expands, attention is increasingly turning from how much capacity is being proposed to how much can realistically be delivered. 

AI adds another layer to demand 

Australia enters this next phase from a position of strength, supported by an established cloud and data centre ecosystem, sophisticated capital markets and strong domestic and international connectivity. 

Sydney and Melbourne remain at the centre of the market, together accounting for approximately 87% of Australia’s existing data centre capacity. However, growing requirements for power and suitable development sites are broadening interest in other markets, including Brisbane, Perth, Darwin and selected regional locations. 

Demand is also becoming more diverse. Alongside major global cloud providers and enterprise customers, specialist operators focused on AI computing are emerging, while requirements across government, defence, cybersecurity and healthcare are creating another source of demand. 
AI is adding another layer to an already strong demand story. With AI expected to account for 29% of global data centre workloads by 2030, we’re seeing the profile of demand, and the infrastructure needed to support it, change quickly.
Sass JaliliHead of Industrial & Logistics, Data Centre Research Australia and Director of NSW Research

Power moves to the centre of the conversation

One of the clearest indications of the scale of change ahead is electricity demand. 

Electricity consumption from Australia’s data centres is forecast to increase more than six-fold over the next decade, highlighting the enormous amount of additional power that will be required if the sector’s development pipeline is realised. 

Perhaps more tellingly, by FY36, data centres are forecast to account for around 19% of grid-supplied electricity in NSW and Victoria. 

The implications stretch well beyond energy consumption. Access to sufficient and reliable power is increasingly influencing where data centres can be built, how quickly projects can progress and ultimately which developments are viable. 

At the same time, facilities are becoming considerably larger as AI and increasingly complex computing requirements reshape the sector. That is placing additional pressure on electricity networks, suitable development sites and surrounding infrastructure. 

A large pipeline, but not all of it will be built

On paper, Australia’s future data centre pipeline is substantial. But there is an important distinction between a project being announced and a facility becoming operational. 

Only around 22% of identified future capacity is currently under construction. Approximately 56% is still in the planning phase, while a further 22% remains at an early stage. 

Bringing a project to life requires developers to navigate a range of hurdles, from securing a suitable site and sufficient power through to planning approvals, capital, customer commitments and construction. 

That means headline development pipelines do not necessarily provide the clearest indication of how much new supply will actually reach the market. 
The challenge is no longer identifying sites or announcing projects. It is demonstrating a credible path to delivery. Securing social licence has become just as important as securing power, customer commitments and capital, and is increasingly the key differentiator between a proposed data centre and one that actually gets built. While Australia's development pipeline appears significant on paper, investors are increasingly focused on deliverability rather than scale, favouring projects with a clear pathway to community support, energisation, leasing and execution.
Darcy FrawleyDirector, Capital Markets, Data Centres, Pacific

Investment is following the growth story

Capital is also moving rapidly into the sector. 

CBRE forecasts Australia’s investable data centre market could grow by approximately 90%, from around A$30 billion in 2026 to A$57 billion by 2030. Australian data centre operators had already raised approximately A$35 billion in debt and equity by early September 2026, compared with A$24 billion during 2025. 

However, as more capital targets the sector, not every facility or development opportunity will carry the same investment characteristics. 

Sites with secured power, strong connectivity, room to expand and greater planning certainty could become increasingly difficult to replicate. Operator experience, the strength of customers and certainty around future income could also become more important as investors distinguish between opportunities. 

AI adds another consideration. Newer facilities are increasingly being designed to accommodate far more intensive computing requirements, including greater electricity consumption and more sophisticated cooling systems. Older facilities may require significant investment to adapt, potentially creating greater differentiation between assets over time. 
Data centre occupancy agreements are progressively becoming larger, driven by increasing AI workload demands and cloud computing, amongst other factors. However, it is not only the customer agreement that underpins the freehold value of a Data Centre, but inherently the access and timing to power that drives it. With growing customer demand spurring larger facilities and capital investment requirements, the timing of data centre development is becoming ever so important.
Adriano RussoSenior Director, Metro Office & Data Centres, Valuation & Advisory Services, Victoria

From growth to execution

The fundamentals supporting Australia’s data centre sector remain strong. AI is adding to established cloud demand, capital is flowing into the market and the investable universe is expanding. 

But the next stage of the sector’s growth may be defined as much by execution as expansion. 

As demand for power, land and infrastructure intensifies, the competitive advantage is shifting towards projects that have already secured the ingredients required to move from proposal to operation. 

For investors, developers and occupiers, understanding what can actually be delivered, rather than simply what has been announced, could become one of the most important distinctions shaping Australia’s next generation of data centre investment. 

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