Australia’s data centre investable universe set to double in four years

The investable universe of the Australian data centre sector is forecast to nearly double to AU$40 billion in the next four years, new CBRE research shows.

CBRE’s Australia’s Data Centres 2024 report estimates the Australian investable universe for data centres currently sits at $23 billion.

CBRE’s Australian Head of Industrial & Logistics Research and newly expanded role to include Head of Data Centre Research, Sass Jalili said with the current pipeline of committed projects and increased demand, largely driven by hyperscalers and adoption of AI, Australia’s investable universe will nearly double to AU$40 billion by 2028. 

“Demand for data centres in Australia is increasing exponentially, key drivers for this are greater data generation and storage needs, growing adoption of cloud computing services, and advancements in technology, particularly the adoption of AI,” Ms Jalili said.

“Several global data centre operators have a presence in Australia, and their built-out capacity (megawatts), has been growing over the past decade. Both large and small players have expanded their server networks and upgraded data storage service facilities to meet rising demand for the industry's services.

“CBRE Research have calculated there is close to 1,500MW (i.e. 1.5 GW) of built-out capacity in Australia. Sydney and Melbourne are the main host to most of the large data centres in Australia, mainly due to infrastructure and business activity. However, the current pipeline of committed capacity indicates significant investment being made in Perth, Brisbane and Canberra,” Ms Jalili added.  

Australia is ranked fifth in the world, second in the Asia Pacific region, for data centre built-out capacity (megawatts) behind USA, China, UK and Germany. The concentration of capacity is in Sydney (60% of national total), but the future pipeline indicates Melbourne's capacity will more than double in the next five years.

Although there are significant projects in the pipeline, the increasing demand for data centres combined with limited supply availability is making the asset class very appealing to investors, says CBRE’s Pacific Data Centres Capital Markets Director, Darcy Frawley.

“Insatiable demand from major occupiers for data centre consumption, especially in the cloud and AI sectors, has driven the growth of the asset class,” Mr Frawley said.

“Occupiers are now competing aggressively to increase their data centre footprint to accommodate future business needs. Australia specifically is set to see a large gap between capacity and demand in the medium term, which will lead to significant rental growth and make the sector even more appealing for data centre investors.”

The report also found land for data centres is now competing with the demand for industrial and logistics space, as the size of land required for data centres is growing.

“The average size of land purchased for data centres has grown significantly just in the past six years, from 1.3ha in 2018 to 15.7ha in 2024,” Ms Jalili added.