Artificial intelligence is reshaping the outlook for data centre development in Australia, driving higher infrastructure demands and investment intensity, according to CBRE research.
New growth drivers emerge
CBRE’s Australia Data Centres 2026 report highlights AI uptake, power availability, and deliverable supply as central themes for the sector. Sass Jalili, Head of Data Centres Research for Australia at the firm, noted that while cloud adoption and digitalisation have historically driven expansion, AI workloads are adding a new layer of scale to the market.
“What is changing is the scale, capital intensity and physical requirements of development,” Ms Jalili said.
She added that future growth will depend on secured power, infrastructure readiness, and experienced operators. The ability to deliver operational capacity is becoming a key differentiator as development requirements intensify.
Locational factors are shifting alongside these demands. Darcy Frawley, Pacific Director of Data Centres at CBRE, observed that electricity availability is broadening where developers consider building sites.
“The optimal location for a data centre increasingly sits at the intersection of power and community support,” Mr Frawley said.
Currently, the Australian data centre footprint remains concentrated in Sydney and Melbourne. However, new campuses require substantially more power and face increasing social licensing issues, prompting a look at alternative locations.
Expansion is moving toward Perth, Brisbane, and Darwin, with regional areas like the La Trobe Valley and Hunter Valley emerging as options where scalable power can be secured, sometimes with support from behind-the-meter generation.
Investment in the asset class continues to grow. Direct investment across Asia-Pacific reached US$11.6 billion in 2025. In Australia, the investable universe is projected to expand by approximately 90% to A$57 billion by 2030.
Operators in the country raised A$35 billion in debt and equity funding between 2026 and early September, up from A$24 billion in the previous year. Mr Frawley stated that Australia’s position as a leading market in the Asia Pacific is supported by its installed capacity and development pipeline.
Capital expenditure by global technology companies is accelerating sharply as hyperscalers invest in cloud and AI infrastructure. Mr Frawley noted that Australia is increasingly participating in this cycle, with major technology companies expanding domestic cloud, compute, and AI infrastructure to reinforce Sydney and Melbourne as strategic regional hubs.
