Australian Data Center Market to Witness Investments of USD 9.6 Billion by 2027: Report

According to Arizton’s latest research report, the Australian data center market will reach USD 9.6 billion by 2027. In 2021, Sydney and Melbourne received 70% of all data center investments in Australia. New data center investors such as Stockland and Trifalga have invested in data centers in Sydney. Sydney is an important data center market in Australia driven by factors such as digitization, connectivity options and growth in 5G deployment.

Melbourne’s data center market has seen investment from STACK Infrastructure, a new entrant to develop data center facilities. Microsoft also invested in developing MEL5, a data center in Melbourne.

There are several colocation operators in Australia. Retail colocations are generating significant revenue, with wholesale colocations growing steadily due to growing interest from cloud service providers.

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In 2021, Vietnam’s Ministry of Finance started using digital data management services under the Digital Records Transformation Initiative under the government’s three-year initiative to modernize the public sector. The country has great potential for renewable energy sources supported by government actions and operator initiatives. For example, the Australian government has launched a renewable energy strategy that aims to generate around 100% electricity from renewable sources by 2030. Operators such as NEXTDC and Equinix have also set their sights on becoming carbon neutral through the adoption of renewable energy.

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According to the report, the Australian data center market is one of APAC’s top markets and is expected to grow by ~45% between 2022 and 2027. The average occupancy of colocation capacity is over 75%, driven by colocation demand in the market. Cloud and IT sector followed by government and BFSI companies.

Cities such as Sydney and Melbourne are expected to witness more hyperscale development, while other cities such as Perth, Brisbane and Adelaide are expected to see more edge data center deployments. The Australian government is supporting data center growth through initiatives such as the “Industrial Land Strategy” for industrial land development, and aims to increase the share of renewables in total electricity generated by 50% by 2025.

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The growth potential of the market has attracted several new entrants such as GreenSquareDC, STACK Infrastructure, Stockland, Supernode, Trifalga and Vantage Data Centers. Demand for Edge data centers has also increased significantly as Edge operators such as Edge Centers and Connected Farms have announced 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 over the next few years.


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