Melbourne Emerges as Hub for High-Density Data Centres
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Australia has secured the position of the world's second most sought-after destination for data centre investments, propelled by a surge in demand for cutting-edge computing infrastructure and strategic access to AI technologies.
The recently released Global Data Centres Report by Knight Frank anticipates a notable compound annual growth rate (CAGR) of 18 per cent in the sector globally, forecasting a market value of US$4 trillion by 2030.
Australia's competitive edge has been reinforced by a recent U.S. decision granting the country exclusive access to Nvidia's AI chips – a privilege shared by only three other nations in the Asia-Pacific region.
Industry experts assert that this strategic advantage is expediting investments from hyperscalers and enterprises, particularly in Melbourne, which is emerging as a pivotal hub for data centre expansion.
As power limitations and land scarcity restrict new developments in Sydney, Melbourne is gaining favour due to its land availability, burgeoning AI ecosystem, and what many perceive as a more adaptable regulatory framework in Victoria.
Hyperscalers, renowned for constructing and operating massive data centres, along with colocation providers, are redirecting their attention to Melbourne to deploy advanced, high-density data infrastructure tailored for AI workloads.
The transition is supported by the escalating rack power densities, leaping from 30–40kW to over 80kW per rack, prompting substantial investments in liquid cooling systems and enhanced power distribution networks.
Angus Klem, Head of Industrial Investments at Knight Frank, said “The purchase of AirTrunk, which develops and operates large-scale data centre campuses across the Asia-Pacific region, by Blackstone and the Canada Pension Plan Investment Board last year, was the largest data centre transaction globally in 2024.”
Klem emphasised, "It cemented data centres as a major growth sector for Australia, and momentum has only been building since then."
He noted sustained foreign investor interest and domestic players gearing up to enter the market, predicting continued rapid expansion within the data centre sector as capital vies for investment opportunities.
While Melbourne spearheads the current growth phase, Knight Frank also identifies increasing interest in Perth and other major cities, hinting at a broader transformation in Australia's digital infrastructure landscape.
Source: Infrastructure Magazine
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