Australia’s data centre sector expands fortyfold in the past 20 years

Australia’s data centre market has experienced extraordinary growth over the past two decades, according to findings in our latest research report, Data Centre Growth in Australia – November 25, which is out now.

Two-thirds of this growth has occurred since 2020; Australia now ranks among the world’s top ten data centre markets and is projected to climb into the global top three by the early 2030s, trailing only the United States and India.

Total national occupancy has expanded from just 37 megawatt capacity (MW) in 2005 to 1,315 MW in 2025 – a fortyfold increase. Notably, two-thirds of that growth has occurred within the past five years, driven by the rapid digitisation of the economy, the surge in remote work during the pandemic, and the exponential rise in AI-related computing demand. Facilities designed specifically for hosting AI workloads have seen demand increase nearly 27 times in the same period.

“The Australian data centre property market has now reached a critical inflection point where demand is outpacing supply. For the first time on record, the volume of live data centre capacity taken up by users in 2023 and 2024 exceeded the amount of new supply brought to market,” said James Ruben, National Director, Specialised Assets at M3 Property.

“The result is a widening gap between supply and demand. This represents the longest sustained period of demand growth exceeding supply growth since records began in 2005, underscoring the sector’s increasing strategic and economic importance,” said Mr Ruben.

According to the report, during 2024–25, Australia has witnessed a surge of landmark investment announcements from major global technology companies and institutional investors, signalling a shift in how Australia is perceived in the global digital economy. “Australia is now globally regarded as a preferred location for hyperscale data centres, cloud infrastructure, and artificial intelligence (AI) innovation,” said Mr Ruben.

Australia’s appeal to investors is underpinned by several strategic factors. Australia offers a transparent and predictable regulatory environment, aligned with global data governance standards. The Security of Critical Infrastructure Act has elevated data centres to the status of essential infrastructure, further reinforcing investor confidence. Strong economic fundamentals, rapid digital adoption, and a stable political environment provide long-term certainty, while secure energy grids in key precincts address one of the most critical operational requirements for data centres.

View the full report at the link below

M3 Property Report – Data Centre Growth in Australia (November 25)