Australia data center market to witness investment of $9.6 bn by 2027

According to Arizton’s latest research report, the Australia data center market is to reach USD 9.6 Billion by 2027. In 2021, Sydney and Melbourne received 70% of Australia’s overall data center investment. New data center investors such as Stockland and Trifalga have invested in the data centers in Sydney. Sydney is a significant data center market in Australia driven by factors such as growth in digitalization, connectivity options, and 5G deployment.

The data center market in Melbourne witnessed investment from new entrant STACK Infrastructure for the development of a data center facility. Microsoft also invested in developing its data center, MEL5, in Melbourne.

Australia has the presence of several colocation operators. Significant revenue is coming from retail colocation, with wholesale colocation growing steadily due to rising interest from cloud service providers.

In 2021, Finance Ministry in the country started using digital data management services under its Digital Records Transformation Initiative according to the three-year initiative by the government for modernization of the public sector in the country. The country has great potential in renewable energy sources supported by government measures and operator initiatives. For instance, the Government of Australia has launched its renewable energy strategy, aiming to generate around 100% electricity from renewable energy sources by 2030. Operators like NEXTDC and Equinix have also aimed to become carbon neutral with renewable energy adoption.

The Australia data center market is among the top markets in APAC and is expected to grow at ~45% between 2022 and 2027. The average occupancy rate of colocation capacity is over 75%, with colocation demand in the market driven by cloud and IT sectors, followed by the government and BFSI companies.

Cities such as Sydney and Melbourne will witness more hyperscale developments, with other cities such as Perth, Brisbane, and Adelaide expected to see more edge data center deployment. The Government of Australia is supporting the growth of data centers with initiatives such as the “Industrial Land Strategy” for industrial land development and aiming to increase the share of renewable energy in the total power generated by 50% by 2025.

The market’s growth potential has attracted several new entrants, such as GreenSquareDC, STACK Infrastructure, Stockland, Supernode, Trifalga, and Vantage Data Centers. The demand for edge data centers also has been significantly growing, with edge operators such as Edge Centres and Connected Farms announcing the deployment of edge data centers in the country. The market is also expected to witness growth in self-built facilities by cloud service providers in the coming years.
CT Bureau