Australia Data Center Construction Market is Expected to Register a CAGR of 6.10% through 2029

Rising Focus on Data Sovereignty and Localized Data Storage, Growing demand for cloud services & digital transformation and expansion of global hyperscale data center operators are the likely to propel the market during the forecast period.

According to TechSci Research report, “Australia Data Center Construction Market – By Region, Competition, Forecast and Opportunities, 2019-2029F”, Australia Data Center Construction Market was valued at USD 3.10 Billion in 2023 and is expected to grow at a CAGR of 6.10% during the forecast period through 2029.

The increasing focus on sustainability and environmental responsibility is driving a significant trend toward the construction of green data centers in Australia. Green data centers are designed to minimize their environmental impact by incorporating energy-efficient technologies, renewable energy sources, and sustainable building practices. This trend is gaining momentum as businesses and governments alike seek to reduce their carbon footprint and promote environmentally responsible practices.

In Australia, where energy consumption and carbon emissions are major concerns, the shift toward green data centers is becoming a key priority. Data center operators are increasingly investing in energy-efficient cooling systems, such as liquid cooling and free cooling, which reduce the energy required to maintain optimal operating temperatures. Additionally, there is a growing emphasis on utilizing renewable energy sources, such as solar and wind power, to power data centers. This not only reduces reliance on fossil fuels but also helps operators manage energy costs in a market where electricity prices can be volatile.

Green building certifications, such as LEED (Leadership in Energy and Environmental Design) and NABERS (National Australian Built Environment Rating System), are also playing a role in shaping the construction of data centers in Australia. Achieving these certifications can enhance a company’s reputation, demonstrate a commitment to sustainability, and even provide financial incentives through tax breaks or subsidies.

The trend toward green data centers is further supported by the increasing demand from customers for environmentally responsible services. Businesses are under pressure from stakeholders, including customers, investors, and regulators, to demonstrate their commitment to sustainability. As a result, data center operators are prioritizing green initiatives to meet market demand and stay competitive.

 

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Based on Data Center Size, In 2023, large data centers dominated the Australia Data Center Construction market, driven by the growing need for high-capacity, scalable, and resilient digital infrastructure. The rapid expansion of cloud computing services, led by global tech giants such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, has spurred the development of hyperscale data centers. These extensive facilities are essential for managing massive data processing, storage, and networking demands, supporting a wide array of digital services used by businesses and consumers alike. The construction of large data centers is crucial to accommodate thousands of servers and advanced cooling and power systems necessary for maintaining efficiency and reliability.

The surge in big data analytics, artificial intelligence (AI), and the Internet of Things (IoT) has amplified the need for robust data storage and processing capabilities. Large data centers are uniquely positioned to handle the substantial data volumes generated by these technologies, providing the computational power required for complex analytics and real-time processing. Their ability to scale efficiently allows businesses to leverage digital transformation fully. Additionally, large data centers benefit from economies of scale, leading to reduced costs per unit of computing power, enhanced energy efficiency, and better overall IT management. They also offer superior security and redundancy, crucial for safeguarding data integrity and availability, particularly in sensitive sectors such as finance, healthcare, and government.

Based on region, Melbourne, is leading the growth in Australia’s data center construction market. Melbourne’s position as a major financial and technology hub provides a strong foundation for data center growth. The city is home to a significant number of enterprises, startups, and tech companies that drive demand for data storage and cloud services. This urban concentration attracts data center operators seeking proximity to major clients and high-value markets. Victoria boasts advanced infrastructure, including a robust network of telecommunications and energy resources crucial for data center operations. Melbourne’s extensive fiber optic network ensures high-speed, reliable connectivity, essential for data-intensive applications. Additionally, the state's energy infrastructure supports large-scale data centers with substantial power requirements. The Victorian government has actively supported the expansion of data centers through favorable policies and incentives. Initiatives aimed at boosting digital infrastructure and technology innovation have encouraged both domestic and international investments. The state’s commitment to improving its technology landscape makes it an attractive destination for data center developers.

Melbourne's rapid population growth and economic development drive increased demand for data services. The city’s expanding tech sector and the proliferation of digital services across various industries create a constant need for advanced data storage and processing facilities. Victoria offers a range of real estate options for data center development, including large, available plots of land and existing infrastructure that can be repurposed. The availability of suitable sites and competitive property costs compared to other major cities also contributes to the region’s growth.

 

Major companies operating in the Australia Data Center Construction Market are:

• AECOM
• Fortis Construction Inc.
• Turner Construction Company
• DPR Construction
• Schneider Electric SE
• Cisco Systems Inc.
• Arista Networks, Inc.
• SAS Institute Inc.

 

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“The Australia Data Center Construction market presents a significant opportunity driven by the increasing demand for digital infrastructure, fueled by cloud adoption, digital transformation, and data sovereignty requirements. The rise of edge computing and the need for sustainable, energy-efficient facilities further enhance this potential. Additionally, the expansion of global hyperscale operators into the region creates opportunities for local contractors and technology providers. With ongoing advancements in data center technologies and the push towards green initiatives, the market is well-positioned for robust growth, making it an attractive investment landscape for both domestic and international stakeholders.” said Mr. Karan Chechi, Research Director of TechSci Research, a research-based global management consulting firm.

“Australia Data Center Construction Market, By Tier Type (Tier 1 & 2, Tier 3 & Tier 4), By Data Center Size (Small, Medium, Large, Massive, Mega), By Infrastructure (Cooling Infrastructure, Power Infrastructure, Others), By End User ( IT & Telecommunication, BFSI, Government, Healthcare, Others) By Region, Competition, Forecast & Opportunities, 2019-2029F”, has evaluated the future growth potential of Australia Data Center Construction Market and provides statistics & information on Market size, structure and future Market growth. The report intends to provide cutting-edge Market intelligence and help decision-makers make sound investment decisions., The report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the Australia Data Center Construction Market.

 

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