Report | Intelligent Investment

Australia Data Centre Trends H2 2022

May 3, 2023

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  • New Data Centre capacity requirements are emerging from the rapid growth of cloud gaming and the metaverse. While hyperscale cloud platforms will be harnessed to support growth in data, more edge Data Centres will be needed to reduce latency, especially in areas where populations are more dispersed
  • A significant amount of supply will be added to the major Australian markets in the near term. Close to three quarters of the total capacity (MW) currently under construction is located in Victoria with the remainder in NSW, where a large amount of construction has been completed in the Sydney market over last 3 years.
  • Data Centre development continues to grow across Australia with circa 183,000 sqm of Data Centre space currently under construction across Australian major cities.
  • Asia Pacific direct data centre investment volume totalled US$1.42 Billion in 2022, representing just shy of 30% of the previous years investment volume (2021). 
  • Investment Interest in Data Centres fell marginally this year, mainly due to increased concerns over carbon emissions and power consumption. Nevertheless, demand for this asset class remains strong and assets available for sale or land for development remains extremely limited. This is expected to improve in 2023 as more data projects come to completion
  • CBRE expects transaction volume and fundraising activity to remain strong in 2023. With data sectors having been named as the second most popular alternative sector for investment by respondents to CBRE’s 2023 Investor Intentions Survey, more investors will increase their allocations to the sector (38%).