Australia is experiencing a surge in data centre investments, with a project pipeline valued at US$20 billion. This growth is driven by rapid AI adoption, the widespread rollout of 5G, ongoing digital transformation, and increasing demand for cloud services.
These factors are helping to position the Asia-Pacific region as one of the fastest-growing data centre markets globally.
Sydney remains Australia's leading data centre market, driven by hyperscale demand and improved global connectivity through new subsea cables. Meanwhile, Melbourne is emerging as a key hub, supported by faster approvals.
Artificial Intelligence is also becoming a core focus with AI and automation expected to generate up to $600 billion a year towards Australia’s GDP by 2030. In late 2024, the Australian Government flagged development of the National AI Capability Plan highlighting development and investment, accompanied by a strategy aimed at promoting growth and setting standards.
Given the huge opportunities in this sector, many industrial landowners and developers are investigating the option of building a data centre to gain exposure to this asset class.
Far from being simple designer warehouses, data centres are among the most secure, high-spec buildings being constructed worldwide and require a highly nuanced approach.
The list of challenges to consider in constructing a data centre often extends beyond the physical aspects of building a bespoke structure-which in themselves can be complex.
Data centres have even larger holistic requirements that range from water availability and disaster proofing to a capacity for uninterrupted power supply, and a need for low latency.
It means that any developer looking to tap into the lucrative data centre market must appropriately evaluate risk right from the feasibility stage.
Three questions consider
At a minimum, potential data centre developers should assess end-to-end viability by asking three key questions.
Top 7 design considerations:
- Layout and mechanicals: Hardware storage in the form racks and cabinets may occupy 40–60% of the built space and must be arranged to optimise airflow. Space must also be allocated for plant rooms, switch rooms, generators, routers, and cabling.
- Power: Data centres use a lot of power. When assessing power source feasibility for site selection, key factors include the energy mix and power generation landscape of the country, grid availability, capacity and reliability, as well as proximity to substations and transmission lines to reduce infrastructure costs. Access to renewable energy—via Power Purchase Agreements (PPAs) or green tariffs—is crucial for meeting sustainability goals, along with evaluating energy costs, carbon intensity and regulatory conditions. It's also important to consider scalability of infrastructure and utility lead times, to ensure timely and efficient deployment. Initial consultation with power authorities is critical to establish the feasibility and determine the available electrical capacity which may determine the maximum IT load and footprint.
- Cooling: High ambient temperatures and humidity pose significant risks to IT equipment performance and reliability. Effective cooling strategies are essential and may include air venting, air recirculation, evaporative cooling, refrigerated systems, liquid cooling, or a hybrid approach tailored to the facility's operational requirements. The liquid-to-air cooling ratio should be carefully assessed during the design phase, based on the anticipated thermal loads and the specific IT hardware to be installed within each data hall. Water availability is a critical factor in site selection, particularly for facilities relying on evaporative or liquid cooling methods. The permitted water flow rates, as confirmed by local water authorities, must be evaluated early to ensure the feasibility of the cooling strategy. This includes allowing for the installation of adequately sized storage tanks to meet both operational demand and resilience requirements.
- Fire: Data centres house sensitive equipment and bespoke fire prevention strategies and systems will need to be established to mitigate the risk of fires causing collateral damage.
- Security: Buildings may require tiered security zones from vehicle barriers and road blockers to pedestrian turnstiles and sophisticated CCTV systems that include movement detectors. Higher rated centres may require additional layers of security including biometric controls.
- Back up: Built-in redundancies are needed to reduce the risk of service loss. This is often referred to as a ‘resilience rating’. It means there may need to be one or even two duplicate plant systems depending on the data centre rating that a customer requires.
- Scalability: Incremental expansions should be considered to enable capacity to grow in line with evolving demand. A modular design approach allows for staged development—beginning with one data hall and expanding as needed. The initial build should include provisions for future buildings, utilities, and infrastructure. This approach allows for staged development while maintaining consistency in design, services, and operational standards.
Navigating the complexities of data centre builds and ensuring their successful delivery and operation requires strategic project management early in the process.
As Australia transitions from smaller, commercial-scale data centres to large, industrial-scale facilities, a more detailed approach to project management is needed – one that emphasises complex system integration and the handling of substantial financial estimates and investments.
Early Project Management involvement supports more informed decision-making across planning approvals, design development, procurement strategy, risk management, and programme planning. Leveraging this expertise from the outset helps de-risk the project, align stakeholder expectations, and establish a clear path to delivery-critical factors in the successful execution of complex, high-value data centre projects.
Project managers are key to managing risk and keeping the design vision aligned with execution, making sure that the build is delivered on time and that the final product meets client expectations while also adapting to the ever-changing requirements of the data centre industry.
Having a knowledgeable and experienced partner like Linesight can help you navigate planning requirements, manage technical subcontracts, and scale your project for future growth.
