Data centres 'major growth sector' for Australia: Report

Australia is only second to the US as a top data centre investment location having deployed $6.7 billion in capital in 2024, according to a new report from Knight Frank.

The Global Data Centres Report projected that the market would hit $6.6 trillion (US$4 trillion) by 2030, at a compound annual growth rate of 18% over the next five years.

The Asia Pacific region currently leads global data centre investment, capturing $25.8 billion (US$15.5 billion) last year, and accounting for up to 70% of cross-border investment.

Meanwhile, the Australian data centre market has gained "significant" momentum, according to the report, linked to the recent US ruling that granted the country access to Nvidia AI chips.

Now, as one of the four nations in APAC exempt from export restrictions, Australia is well poised in the AI race against the likes of India, Japan, Malaysia, Singapore and Thailand, Knight Frank said.

Knight Frank head of industrial investments Angus Klem said buyer demand for data centres was only strengthening in Australia, pointing to the example of the sale of AirTrunk by Blackstone to the Canadian Pension Plan Investment board in 2024.

"[The sale] cemented data centres as a major growth sector for Australia, and momentum has only been building since then," Klem said.

"We have seen strong investment from overseas investors, with Australia the second top investment location globally for data centres last year.

"However, we are also seeing domestic buyers doing the groundwork and readying themselves to invest, and with capital competing for opportunities, we will continue to see rapid growth in the data centre space.

"Sydney has seen significant activity in the data centre space, and while the focus now looks to be turning to Melbourne, we are also seeing Perth gain more traction and over the coming years, the momentum in the data centres sector will flow through to every Australian capital city."