This article is from the Australian Property Journal archive
Data centre development in Australia remains the third most expensive location in the Asia Pacific region.
According to Cushman & Wakefield’s latest Asia Pacific Data Centre Construction Cost Guide, the regional cost to build in Australia is US$9.63m/MW, with construction cost inflation seen at 5%.
Like Australia, India was the only other country where the rate of construction inflation increased, primarily driven by strong demand from both local and international players.
Possible development coming online in the next 12 to 18 months are likely to push costs up.
For a 20MW data centre in Sydney, Cushman & Wakefield expects the monthly power cost to be at US$86/kW or US$31.5m annually. However, the report notes that it could take two to three years for new power connections in key locations.
Site purchase costs is reported to be US$1,036/sq m.
Forecasts indicate that Australia’s data centre development pipeline is the fourth largest in APAC at 1,610MW which equates to US$15.5bn of capital required by 2030.
“With the potential introduction of data sovereignty laws, Australia is well placed for regional AI workloads. Compliance with data regulations introduced by respective governments will make location one of the key selection criteria for data centre expansion strategies across all operators,” said Alex Moffat, Australian head of APAC data centre capital markets and advisory at Cushman & Wakefield.
“Whilst power availability continues to top the list of challenges throughout APAC, Australia is well placed from a renewable energy generation perspective. Melbourne and Perth particularly are well placed for both generation and transmission,”
“Sydney is experiencing increased delays in major infrastructure upgrades which are limiting development options before 2029.”